TaxPersonal TaxTax breaks lure investors to VCTs

Tax breaks lure investors to VCTs

Funds invested in venture capital trusts to top £507m

Investors are piling their funds into venture capital trusts in effort to
take advantage of favourable tax breaks before the 5 April deadline.

To date £280m has been invested in VCTs with experts expecting this to grow
to more than £507m by the end of the year, the amount invested last year.

VCTs invest in unquoted firms or shares, as well as some of those listed on
the smaller exchanges like the Alternative Investment Market or Ofex.

The influx of money is being driven by fears that Gordon Brown may cut back
on generous VCT tax breaks in his budget on 22 March, The Times
reported.

However, advisers have warned investors to select their trusts carefully as
not all of them are expected to make a profit.

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