Calculus extends VCT offer to polling day

Calculus Capital has extended its offer to waive initial fees on investments into its Venture Capital Trust (VCT) till December 12th. The move will allow investors to see their adviser before polling stations open.

All three parties have published their manifestos and need to find the cash to pay for their spending plans. Labour and the Liberal Democrats have unveiled proposals to reduce Capital Gains Tax (CGT) allowances. Although the Conservatives do not mention CGT specifically, they have committed to no increase for income tax, National Insurance and VAT.

Labour will bring CGT and treatment of dividends in line with income tax to raise £14bn. It is also planning to increase income tax for high earners – earnings over £80,000 will attract 45% income tax; earnings over £125,000 will be taxed at 50%. The current CGT allowance of £12,000 will fall to £1,000.

The Liberal Democrats say they will abolish the separate CGT allowance and tax capital gains and salaries through a single allowance.

Venture Capital Trusts (VCTs) are not mentioned specifically by any of the parties. However the Conservative manifesto confirms that the Enterprise Investment Scheme (EIS) will continue, calling it ‘spectacularly successful’.

John Glencross, CEO of Calculus Capital said: “VCTs and EIS schemes have played an important part in the plans of many investors since the mid-90s. Historically, chancellors of all colours have supported them because they recognise their role in delivering capital to Britain’s most promising companies.

“We know advisers are receiving a lot of calls from clients who are worrying about safeguarding their wealth. We’ve extended the deadline on our offer to waive the initial 3-5% charge to December 12th as we understand clients may wish to speak to their adviser and make investment decisions prior to the election.”

The discount was originally introduced before election campaigning began and was due to run until the end of November.

Calculus launched its first VCT over a decade ago and has consistently hit its dividend targets. It is aiming to deliver an annual tax-free dividend of 4.5% as well as long-term growth. The minimum investment is just £5,000.

Benefits of VCTs

  • You can invest up to £200,000 a year into a VCT
  • Investors can claim an income tax deduction of 30% on the amount invested (assuming they have earned that amount in a year)
  • Dividend payouts from a VCT are tax-free
  • Gains are free of CGT
  • Investments must be held for at least five years