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Finance & legal • 17 ADVERTISEMENT FEATURE


Why VCTs could help you plan for your retirement


Venture Capital Trusts (VCTs), such as Triple Point’s Venture Fund VCT, can off er useful investment options


Investors are facing a challenging economic climate. The last Autumn Statement reduced the income tax additional rate threshold from £150,000 to £125,140, thereby increasing taxes for those on higher incomes. Furthermore, the Dividend Allowance and Capital Gains Tax (CGT) Annual Exempt Amount are set to halve from April 2023, putting additional pressure on more traditional investments. Fortunately, the government also


wants to encourage investment in certain areas of the UK economy, such as the best UK-based start-ups. It does so by off ering incentives such as income tax relief and CGT-free growth to those who back them.


Venture Capital Trusts (VCTs)


are a way for investors to help fi nance these young British fi rms and have the support of the government as tax-effi cient solutions. This allows investors to enjoy tax-exempt dividends and capital gains, as well as benefi t from diversifi cation. There are several UK companies — including some household names — which were backed by VCTs in their infancy, providing signifi cant returns to these early investors. With a VCT, investors can claim


up to 30% income tax relief on up to £200,000 invested in a single tax year (provided shares are held for at least fi ve years) and will also benefi t from tax-free capital gains and dividends. While the concurrent recession and government policies may be putting a strain on investment returns, the tax relief that VCTs aff ord can make a big diff erence to an investor’s net profi ts.


HELPING INVESTORS BOOST THEIR PENSION Over the past 15 years, the tax benefi ts off ered by pensions have


been cut by successive governments in need of more revenue. Whereas people have previously benefi ted from tax relief when investing up to £255,000 per tax year in a pension, the annual pension allowance is now just £40,000 a year, which drops to only £4,000 for those earning more than £312,000 a year1


. Triple Point believes that this


means investors who are thinking about their long-term retirement plans should consider VCTs as a complement to existing pension arrangements, particularly if they’re worried about falling foul of lower contribution limits. They allow individuals to diversify their overall retirement portfolio and can provide another source of income — all while being tax free. Amid all the economic


uncertainty, crises and cost of living pressures, VCTs, such as Triple Point’s Venture Fund VCT, off er an alternative investment that can tap into young, dynamic, high-growth businesses, while also enabling investors to diversify their portfolios and take advantage of government incentives.


The Triple Point Venture


Fund VCT carries all the risks of investment in smaller companies and places investors’ capital at risk. There’s no guarantee that target returns will be achieved, and investors may get back less than they invested. Past performance and forecasts are not a reliable indicator of future performance. Tax treatment depends on the individual circumstances of each client and is subject to change. Tax reliefs depend on the VCT maintaining its qualifying status.


1 https://www.wealthclub.co.uk/articles/investment-news/vcts-new-pension-higher-earners/ This article is an advertisement for the purposes of the Prospectus Regulation Rules and is not the prospectus. Investors should only subscribe for shares on the basis of information contained in the Prospectus which is available via the Documents section of the website. This article has been approved by Triple Point Administration LLP, which is authorised and regulated by the Financial Conduct Authority. Triple Point Administration LLP registered in England & Wales no. OC391352.


For further information


To read more about VCTs visit triplepoint.co.uk or speak to your fi nancial adviser. T: 020 7201 8989


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