VCTs' high yield potential

As VCT portfolios reach maturity (normally after three to five years), VCTs have the potential to become tax effective high yield vehicles as their realised capital gains and income can be distributed as tax-free dividends to qualifying shareholders. The early VCTs are now heading towards the fifth anniversary of their launch which is an important date. After this date shareholders can sell shares without withdrawal of the 20% income tax relief claimed at the time of investment. To do so does mean that any capital gains tax, which an investor has deferred, will be crystallised which is a ...