UK Investors Flock to Venture Capital Trusts Amid Tax Hike Concerns

Team S · 2024-10-23T08:42:41.000Z

In a rapid move driven by potential tax changes, UK investors have poured £90 million into two venture capital trusts (VCTs) within just 45 days. This rush comes as speculation mounts that the upcoming Budget could see an increase in capital gains tax, currently set at 20 percent. The anticipation of such a hike is prompting investors to seek tax-efficient investment vehicles.Venture capital trusts offer significant tax advantages, including exemption from capital gains tax on profits when sold and a 30 percent income tax relief on investments. These benefits have made VCTs particularly attractive, especially as the new Labour government has pledged not to alter income tax and VAT, making capital gains tax a likely target for revenue generation. As the Chancellor prepares for next week's Budget announcement, plans are reportedly underway to raise capital gains tax rates by several percentage points to bolster the Treasury's finances. This potential shift underscores the urgency among investors to capitalize on existing tax reliefs before any changes are implemented.

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UK Investors Flock to Venture Capital Trusts Amid Tax Hike Concerns | Newnex