VCT

Question 1

What do VCTs invest in?

Answer 1

Indirect investment predominantly investing in smaller companies.

VCT is a product - a collective investment scheme

Companies are unquoted trading companies- to help a range of business grow and eatablish

Not a shareholder

Question 2

Are dividends payments from a VCT liable to income tax?

Answer 2

They Exempt from income tax up to £200,000 per tax year

Question 3

Investing in VCTs provides income tax relief at what rate?

Answer 3

30% up to max investment of £200,000

Question 4

How is tax relief claimed on when investing in a VCT?

Answer 4

Immediately

It’s a tax reducer

There must be income tax liability in the first place in order for it to be reduced

Question 5

How long do you need to hold a VCT for to claim income tax relief?

Answer 5

5 years

Question 6

Is CGT payable on a VCT?

Answer 6

No

There is also no holding period

Therefore Losses can not be registered

Question 7

CGT - Do you get reinvestment relief through a VCT?

Answer 7

No

Question 8

Are VCT free from IHT?

Answer 8

No they form part of estate for IHT purposes

Question 9

How long do you need to hold a VCT to benefit from the income tax relief of 30%

Answer 9

5 years

If shares are withdrawn within 5 years you have to pay the tax relief back

There is no carry back available

Question 10

Are dividends subject to income tax in a VCT?

Answer 10

No - Dividends are exempt from income tax