VCT investments question.

[Pondlife]

I understand you can get Inc Tax relief @ 30% for VCT investments.

If I were to take divs from MyCo well into the 25% additional tax owed bracket and invest in a VCT would I in effect be paying hugely reduced tax? Or have I grossly misunderstood this?

For example, I take 60K above the tax bracket out as a gross div, meaning an additional tax liability of 15K owed to hector. I then put the 54K cash into a VCT and claim tax relief of 16.2K against the tax owed?



Oi NLUK, yes I could ask my accountant but I wanted some 'specialist' advice here. (and no I haven't done a search)

[Pondlife]

Just to add I understand I need to keep the shares for 5 years.

Info was based on this

[northernladuk]

Oi NLUK, yes I could ask my accountant but I wanted some 'specialist' advice here. (and no I haven't done a search)

Grrrr <grumble grumble>

[Pondlife]

Anyone?

[ASB]

Broadly, yes. This might help you find what you need for the specific circumstances you have.

HM Revenue & Customs: Venture Capital Trusts

Which is the exact link you posted of course. :-(

[ASB]

Pondy,

One problem you **might** have in the scenario you describe might be that the releif is capped at 15k, being the amount payable under SA on the dividend. However if you have paid other income tax you should be OK.

Without wishing to teach you to suck eggs, what I often do in this sort of circumstance is to create a new tax return in my self assessment account and see what answer it gives. Can also do a few what ifs. Obviously I don't file the return....

I don't know if online SA handles VCTs or not though.

[prozak]

Looks like a great idea if your risk tolerance is high enough.

[Fred Bloggs]

I invested in a VCT and regretted it, the investment performance can be, and in my case was, dire.

[Waldorf]

I invested in a VCT and regretted it, the investment performance can be, and in my case was, dire.

Same with me, I have abandoned these riskier investments, I invest in solid, proved companies, ok steady and perhaps boring growth, but it is generally reliable and overall I think I have done better with these than with VCTs and of course "high tech" shares in the late 1990's.