The introduction of higher taxes has brought VCTs back to the attention of many investors. Since their inception in 1995, VCTs have come a long way and are now run by experienced managers who are able to create strategies which make the most of the VCT rules.
With marginal tax rates at their highest for over 20 years, everyone is looking at ways to enhance their net investment returns and 2011 could turn out to be a record year for VCTs. However, as with all investments it is important to pick the right fund to meet your objectives. Bestinvest has researched every VCT that has been issued in the UK and we take a look at 3 of our top recommendations below:
Matrix linked offer VCT
Through this offer, investors will become immediately eligible for dividends produced by the underlying funds, freeing up the majority of the money to be invested under the old, less restrictive, VCT rules. We believe this is a quality team giving exposure to Management Buyouts across a variety of sectors and investors get instant access to an established portfolio. This is our top recommendation for a generalist VCT and would be suitable for most VCT investors.
| Standard Initial Charge: | 5.50% |
| Saving with Bestinvest: | 2.75% |
| Early bird discount: | 1.50% (until 17 January) |
| Total saving with Bestinvest: | 4.25% |
| Saving on £50,000 invested: | £2,125 (including Early bird discount) |
| Bestinvest rating | ***** |
Read more on the Matrix linked offer VCT
Download the Prospectus
Puma VCT VII
We feel Puma is the best offering for a limited life VCT. The fund replaces bank funding in companies, lending money to cash generating businesses which are fully asset backed with a charge over assets of the company. The current credit conditions mean they have a wider than normal selection of good companies to back and the experienced team at Shore Capital have proved their expertise in structuring deals. This fund aims to wind up and return capital to investors after the fifth anniversary.
| Standard Initial Charge: | 5.00% |
| Saving with Bestinvest: | 2.25% |
| Early bird discount: | 0% |
| Total saving with Bestinvest: | 2.25% |
| Saving on £50,000 invested: | £1,125 (including Early bird discount) |
| Bestinvest rating | ***** |
Read more on the Puma VCT VII
Download the Prospectus
Early bird discounts
| VCT | Discount |
|---|
| Matrix VCTs linked offer | 1.50% until 17 January 2011 |
| Triple Point TP11 | 1.5% until 31 January 2011 |
| Albion Linked Offer | 1% on first £2.5m (£1.9m raised) |
| Foresight Solar | 1% until 31 January 2011 |
| Hazel Renewable Energy | 1% until 31 January 2011 |
| Northern Venture Trust (existing investors) | 2% until 31 January 2011 |
|
Ingenious Solar | 1.5% until 31 January 2011 |
| Edge G Shares | 3% until 31 December 2010, 2% until 31 January 2011, 1% until 28 February 2011 |
For further information about VCTs speak to one of our Investment Professionals on 020 7189 9999. We are open from 8.30am to 5.30pm, Monday to Friday.
Important information
VCTs should be regarded as higher risk investments. They are only suitable for UK resident taxpayers who can tolerate higher risk and have a time horizon of greater than five years. Past performance is not an indication of future performance. Share values and income from them may go down as well as up and you may not get back the amount originally invested. Owing to the nature of their underlying assets, VCT's are highly illiquid. Investors should be aware that they may have difficulty, or be unable to realise their shares at levels close to that that reflect the value of the underlying assets. Tax levels and reliefs may change and the availability of tax reliefs will depend on individual circumstances. You should only subscribe for new VCT shares on the basis of the relevant prospectus and must carefully consider the risk warnings contained in that prospectus.