By David Walker At least five venture capital trusts are falling well short of their minimum targ...
By David Walker
At least five venture capital trusts are falling well short of their minimum targets. Investors should ensure that their trust has met the minimum subscription.
Phil Cammerman, managing director of Yorkshire Fund Managers, said VCT investors should look for trusts that have reached minimum fund targets and have portfolios of at least £5m.
The UK's VCTs have so far raised less than half the nearly £700m they were hoping for this tax year. Harvest VCT closed its offer on 14 March after failing to raise the minimum of its £20m subscription.
Below the £5m mark, it becomes difficult to reach economies of scale for managers and diversity of investments for portfolios.
Cammerman's British Smaller Technology Companies VCT 2 has raised about £5.5m, compared with its £1m minimum.
Martin Churchill, director of research at www.tax-shelter-report.co.uk, said the 24 VCTs on the market have raised about £330m which, although more than the £300m raised last year, still leaves 16 VCTs short of funds.
Ole Bettum, director of Close VCT Management, said many trusts raised money late last year, early in the VCT season, leaving the market with fewer investors now. Close's Aim VCT received £18m in 20 working days in December.
If VCTs do not inform subscribers they have failed to reach their minimum subscription until the start of April, investors might not be able to subscribe for another VCT before the tax year's end, losing income tax relief for that tax year and possibly endangering deferral of their capital gains tax bill.
Set up Vanguard in 1975
‘In the know’
Owen to pay £3m
Lasting power of attorney