The impact of the new VCT rules

As is well known, one of the most attractive qualities of venture capital trusts (VCTs) is their ability to pay tax-free dividends.

The tax-free income from many VCTs, especially in the generalist space, is reliant on successful exits.  These days, many VCTs have built up a good track record of paying consistent levels of income underpinned by stores of distributable reserves.     The rules governing the type of investment VCTs can make have altered considerably in the last three years or so. Autumn Budget 2017: New EIS and VCT rules revealed to boost investment in higher risk businesses From the changes to management buyouts (MBO) to those more recently proposed in the Autumn Statement last year, it will be...