HMRC error leaves VCTs unable to issue shares

clock

Venture Capital Trusts (VCTs) have been hoarding investor cash after an error from HM Revenue and Customs left the vehicles afraid of issuing new shares.

New legislation introduced by the Treasury was intended to prevent VCTs from abusing their tax-efficient status by paying out dividends to investors buying in to a VCT for a very short period of time purely to collect the tax-free dividend. However, wording in this year's Finance Bill mistakenly implies trusts paying dividends to any shareholders purchasing new shares after 6 April would lose their tax-efficient status. Some VCTs are understood to have held off issuing new shares after 6 April as a result, with fears compounded by HMRC's decision last month to revoke the tax-efficient...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax Planning

Majority of advisers think NI cut will not boost pensions savings

Majority of advisers think NI cut will not boost pensions savings

Only one in ten think people will put the extra cash into pensions savings

Isabel Baxter
clock 11 March 2024 • 1 min read
Partner Insight: Royal London's Fiona Hanrahan — 'Your top tax year end questions answered'

Partner Insight: Royal London's Fiona Hanrahan — 'Your top tax year end questions answered'

Fiona Hanrahan, Senior Intermediary Development and Technical Manager, Royal London
clock 08 February 2024 • 3 min read
Treasury collects £2bn in 12 weeks as IHT receipts continue to soar

Treasury collects £2bn in 12 weeks as IHT receipts continue to soar

Figure breaks down at £22m a day for the government’s coffers

Hope William-Smith
clock 21 July 2023 • 2 min read