Budget changes hasten VCT decline

The research company suggests the total for tax year 2006/7 is £269.32m, a drop of £521.08m from the £790.40m total in 2005/6. Allenbridge says budget changes to VCT rules can be blamed for the drop in funds raised. The Chancellor Gordon Brown reduced the income tax break on VCTs from 40% to 30% and increased the holding periods from three to five years. Ewoud Karelse, an analyst with Allenbridge, says it suspected a drop in funds following the changes. “We did predict that the total raised for this tax year would be around £250m,” he says. However, further changes to VCTs made in...