How do VCTs and EIS compare for retirement planning?

Philip Cook, private client partner, Thomas Miller Investment Complement pensions VCTs provide tax-free dividends, which makes them attractive for higher-rate tax payers seeking income in retirement who are willing to lock their money away. Capital at risk is reduced by an income tax deduction of 30% on the amount invested, assuming shares are retained for five years. Therefore, this can make VCTs a good complement to pension income in retirement. Meanwhile, dividends paid to EIS investors are taxable, so returns are generally distributed as capital that is tax free. This profile mak...