Discussion
I'm looking at chucking a few k into a VCT before April. Nothing I can't afford to lose, looking for 5+ year limited life product to hopefully return something worthwhile considering the tax break.
Already have products from Puma and TriplePoint from the last couple of years, so I'm thinking I should look at a 3rd provider to spread the risk?
Anybody else invest in them?
Already have products from Puma and TriplePoint from the last couple of years, so I'm thinking I should look at a 3rd provider to spread the risk?
Anybody else invest in them?
Unless you're using your dividend and CGT allowances already, I'm not convinced they're that attractive. Yes there's a tax advantage, but the management fees are typically wince worth enough to use a significant fraction of that, and the lack of saleability/liquidity I find annoying.
On the positive side, I've found the dividend yield remarkably robust (certainly compared to the dire warnings that they're sold with), although I understand some of the recent legislation changes may make that less reliable.
Looking at https://www.clubfinance.co.uk/Open-VCT.php I'd suggest you want to get a move on, a decent no. of offers (Northern in particular) are already fully subscribed.
On the positive side, I've found the dividend yield remarkably robust (certainly compared to the dire warnings that they're sold with), although I understand some of the recent legislation changes may make that less reliable.
Looking at https://www.clubfinance.co.uk/Open-VCT.php I'd suggest you want to get a move on, a decent no. of offers (Northern in particular) are already fully subscribed.
Thanks.
Yes... Dividend "allowance" maxed hence I'm looking to minimise the tax hit where sensible. Luckily talking much less than other years due to some losses I can offset.
I have seen comments on a few finance forums that for various (differing) reasons the usual choices are no longer as attractive... legislative or new funding cycles or just the reality of letting the tax tail wag the dog.
Might be time for a rethink.
Yes... Dividend "allowance" maxed hence I'm looking to minimise the tax hit where sensible. Luckily talking much less than other years due to some losses I can offset.
I have seen comments on a few finance forums that for various (differing) reasons the usual choices are no longer as attractive... legislative or new funding cycles or just the reality of letting the tax tail wag the dog.
Might be time for a rethink.
Both the underlying company being invested in and the management company ie Octopus need to make sense to you or at least do some due diligence on track record first. EIS and SEIS companies also offer alternative investment choice.
All are meant for the so called sophisticated investor -whatever that means !
Obviously some have more tax advantages than other vehicles when it comes to offsetting CGT ( both gain and loss ) but pretty much see 30% relief available in income tax.You have to hold for between 3/ 5 years to gain all the tax benefits.
Fwiw I have had Octopus Eclipse ( now Apollo ) and then Titan VCT 's for years and on a nett position am more than happy.
All are meant for the so called sophisticated investor -whatever that means !
Obviously some have more tax advantages than other vehicles when it comes to offsetting CGT ( both gain and loss ) but pretty much see 30% relief available in income tax.You have to hold for between 3/ 5 years to gain all the tax benefits.
Fwiw I have had Octopus Eclipse ( now Apollo ) and then Titan VCT 's for years and on a nett position am more than happy.
Thanks for the reply, I wasn't aware of EIS/SEIS.
I'm not by any means a sophisticated investor but I have taken financial advice and it's only after taking advice that I'm considering investing. Just wondering whether the OP had an update.
I'm meeting someone from Octopus this week, so if anyone has any suggestions for questions to put to him let me know
I'm not by any means a sophisticated investor but I have taken financial advice and it's only after taking advice that I'm considering investing. Just wondering whether the OP had an update.
I'm meeting someone from Octopus this week, so if anyone has any suggestions for questions to put to him let me know
Could someone explain to a complete novice at these how they would work (if at all) for a basic rate taxpayer?
If I kept invested 10k would that give me 30% tax back i.e £3333k each year? Or is that too simplistic?
If so would I have to reinvest money each year?
Do I get the taxback via my my annual tax return?
If I kept invested 10k would that give me 30% tax back i.e £3333k each year? Or is that too simplistic?
If so would I have to reinvest money each year?
Do I get the taxback via my my annual tax return?
If you paid more than £3333 income tax in that year then yes. You have to hold the investment for 5 years, you shouldn’t expect market leading performance in terms of dividends over those five years, and because secondary market VCT shares don’t qualify for tax relief you might find it hard to sell them at the end of the term. Octopus will buy back at 95% of current share price. If you want more tax relief in future years, yes you would have to buy in again.
These numbers may or may not work for you...I would suggest they maybe would not unless you have maxed pension/ISA contributions.
For me, I have maxed out dividends, ISA and pension so looking for a new channel to invest in. I think the tax relief on the initial amount, the
Tax free dividends and the CGT free sale at the end make it work even given the large management and sign up fees.
I may have glaringly obvious errors in the above I’m not very investment literate and it’s quite early
These numbers may or may not work for you...I would suggest they maybe would not unless you have maxed pension/ISA contributions.
For me, I have maxed out dividends, ISA and pension so looking for a new channel to invest in. I think the tax relief on the initial amount, the
Tax free dividends and the CGT free sale at the end make it work even given the large management and sign up fees.
I may have glaringly obvious errors in the above I’m not very investment literate and it’s quite early
Could someone explain to a complete novice at these how they would work (if at all) for a basic rate taxpayer?
You get 30% tax relief back on whatever sum you invest ( up to certain maximum ) providing you have paid sufficient income tax in the first place.
If I kept invested 10k would that give me 30% tax back i.e £3333k each year? Or is that too simplistic?
The investment attracts the Tax relief once - you can repeat each tax year.
If so would I have to reinvest money each year?
Yes as above.
Do I get the taxback via my my annual tax return?
Yes or you can apply to HMRC as soon as you invest.
You get 30% tax relief back on whatever sum you invest ( up to certain maximum ) providing you have paid sufficient income tax in the first place.
If I kept invested 10k would that give me 30% tax back i.e £3333k each year? Or is that too simplistic?
The investment attracts the Tax relief once - you can repeat each tax year.
If so would I have to reinvest money each year?
Yes as above.
Do I get the taxback via my my annual tax return?
Yes or you can apply to HMRC as soon as you invest.
alscar said:
Yes or you can apply to HMRC as soon as you invest.
Could you expand on that bit for me, please? I've invested in VCTs each year for a number of years but the tax relief usually goes in as part of my return in Jan the following year. Is there a way to accelerate the claim without filing my return early (which would be difficult for all sorts of reasons).thanks in advance
You can simply send the VCT certificate/s directly to your tax office or via your accountant if u use one as soon as you receive them.
Then your paycode will be automatically adjusted with a rebate paid or depending on how soon after the tax year has started you may just get credited directly back to your bank account.
Then your paycode will be automatically adjusted with a rebate paid or depending on how soon after the tax year has started you may just get credited directly back to your bank account.
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