Viewing size - A,A,A

KEY AREAS

Mailing List

Would you like to be notified when we update the site, launch new products or release our newsletters? Simply submit your details below.

Frequently Asked Questions

  1. What benefits does a Venture Capital Trust offer over other investments?
  2. Why should I invest in a VCT?
  3. Why should I invest in a VCT managed by Rensburg Sheppards Investment Management?
  4. A Rensburg Sheppards managed venture capital trust offers:
  5. What is our investment strategy?
  6. What tax reliefs are available?
  7. How does the initial 40% Income Tax relief work?
  8. Can I defer Capital Gains Tax?
  9. How do I claim?
  10. How do I get Income Tax relief on dividends?
  11. If I buy VCT shares in the market, what tax reliefs can I obtain?
  12. What happens when I sell my VCT shares?

What benefits does a Venture Capital Trust offer over other investments?

A unique feature of a VCT is that only 70% of the funds need to be invested in unquoted (including AIM) companies within three years, which gives the fund managers time to select the best available companies in which to invest. In the interim, a VCT can invest in gilts, unit trusts, quoted equities or bank deposits. After three years, providing that the 70% target has been achieved, the remaining 30% can be retained in gilts etc. This allows the fund managers additional flexibility to make follow-on investments as and when required, so providing investors with a margin of security.

Why should I invest in a VCT?

Apart from the attractions of directly participating in the growth of the unquoted and AIM company portfolio, there are valuable tax benefits. These include income tax savings on subscription and tax free gains on the sale and income from the shares held in a VCT. Individuals investing up to £200,000 in any one tax year are entitled to all of these reliefs.

Why should I invest in a VCT managed by Rensburg Sheppards Investment Management?

The most important factor to consider when deciding which VCT to invest in is the quality of the fund management team. Established over 20 years ago the team has considerable experience in dealing with venture capital, AIM and the smaller company sectors'.

A Rensburg Sheppards managed venture capital trust offers:

An experienced team of executives;

  • Supervision of all aspects of the VCT's business 'in-house'- including investment outside the unquoted company portfolio;
  • An excellent track record of making investments of the size and type suitable for a VCT. Since 1983, the managers have invested in more than 100 unquoted companies and continues to receive upward of 400 proposals every year from which to select investments.

What is our investment strategy?

We mainly invest in companies placing new shares on the Alternative Investment Market (AIM), because this helps our objective of building a balanced and relatively liquid portfolio. We sometimes provide ordinary and preference share capital to expanding unquoted companies seeking an AIM flotation within 12/24 months, in Northern England. We will also invest in companies elsewhere in the UK.

Typically, our investments are between £250,000 to £1m and aim to fill the equity gap left by larger venture capital investors, many of whom are not prepared to make investments below £1m.

What tax reliefs are available?

For UK resident investors aged 18 and over who subscribe for up to £200,000 of new shares in a VCT in each tax year, these are the reliefs:

  • Income Tax savings of 30% of cost (pre 05/04/2006 - 40%)
  • Tax free dividends
  • Tax free capital gains

You can subscribe for more than £200,000 of shares in a VCT in any tax year but, you will not obtain tax reliefs on investments greater than this amount.

How does the initial 40% Income Tax relief work?

Having made a claim, your income tax liability for the year of subscription is reduced by 40% (now 30%) of the amount invested even if you do not pay tax at the 40% rate. In order to obtain the maximum tax saving of £80,000 (£60,000 post 05/04/2006) per tax year, you must have £80,000 (£60,000 post 05/04/2006) of income tax liability.

Can I defer Capital Gains Tax?

Since 6 April 2004 this is no longer possible.

How do I claim?

The VCT provides you with a share certificate setting out the details of your investment and a form to claim income tax relief. This can be done either when submitting your tax return or by obtaining an adjustment to your tax coding.

How do I get Income Tax relief on dividends?

All dividends received by an investor from a VCT are free of tax. There is no need to include VCT dividends in your tax return.

If I buy VCT shares in the market, what tax reliefs can I obtain?

You will still obtain tax free dividends and there will be no capital gains tax on disposal but, you will not receive either the initial income tax relief or the opportunity to defer capital gains.

What happens when I sell my VCT shares?

When you sell, the disposal is free from Capital Gains Tax; however, any previous capital gain which has been deferred will, subject to other available tax reliefs and exemptions, become liable to Capital Gains Tax at the rate then applicable. If you sell within three years of subscription, the initial income tax relief will become repayable.