Tax Efficient Options

enator

paulypost wrote: »

"Re-cycling" mature VCT's - I have come across a note in the Risk Factors section of Apollo appln form that this cannot be done within the same VCT without losing the tax benefit. Does that mean that all you VCT investors have an array in order to go on getting tax relief effectively from the same capital? I have tended to stick with the same provider (Apollo) because of good returns. To re-cycle my original (now 7-yr old) investment I therefore need a new VCT - any suggestions?

You must mean Octopus Apollo? Octopus are the managers & Apollo is the VCT name.

Gideon changed the rules because VCT's were 'flipping' shares for their shareholders i.e. they would buy your shares back and then issue new ones so you got another 30% tax relief without any cost or effort. Also it didn't actually raise any new funds, so was seen as a 'wheeze'. This was useful whilst it lasted though

Now there has to be a period before and after for selling & buying VCT's - however, this does relate to the actual VCT being sold, so if you sold the Octopus Apollo shares then you can't re-purchase them for (I think) six months. This apparently applies to the discrete VCT though, so there is nothing to stop you buying any other VCT even from the same manager - Octopus have several others including AIM, AIM 2 and Titan.

I have shares in all, and they are actually good performers.

As for only buying into one VCT, I would advise diversification across a range of limited life, Generalist & AIM and also across a number of managers (except Foresight :mad:)

paulypost

Thanks very much jamesd and enator. I have a mtg with my IFA tomorrow and he's already told me that they now have just one VCT provider on their approved list (Unicorn). Am tempted to just go ahead instead of ploughing thru performance details and facts sheets. Any suggestions with regard to a shortcut?

enator

Not surprisingly, I do have Unicorn shares as well

They are running a Shareholders roadshow in London & Manchester on the 4th March where you meet the managers (and sometimes representatives from the co's they invest in) - free food also, so what's not to like.

I find it strange they only have Unicorn as an approved VCT, but of course that is their opinion and you must be free to pick any you wish.

Here are the current open offers;

http://www.clubfinance.co.uk/Open-VCT.php

Here is the funds raised so far info;

http://www.clubfinance.co.uk/VCT-funds-raised.php

You want to sell Octopus Apollo and buy new VCT's to claim the 30% tax relief in this Tax Year? If so, the current NAV is 84.7p and if they buy them back they will give you this minus 5%. Their web site explains how to dispose of shares.

The latest NAV prices are here (ignore the share price in the 1st column);

http://www.trustnet.com/Investments/VCTPerf.aspx

If you are happy to take advice from a random stranger on the internet:eek:, then these are my top performing VCT's so far (although of course this is no guarantee of anything )

In order then;

Baronsmead 5 81.5% Offer closed in one day
Maven Growth Opps 1 76.4% Offer closed for this Tax Year
Maven Growth Opps 3 75.3% Ditto
Downing 3 H 65.5% Offer open other Downing VCTs
Octopus AIM 63.4% Offer open
Mobeus I&G 61.6% Offer open
The Income & Growth VCT 58.9% Offer open, nearly full

So, several Managers there - please do your own due diligence on the various VCTs mentioned. Downing are currently offering the "Three 'J' Share" - this is Limited Life, wrapping up in year 6, so could be of interest if you wish to bail out without the usual Manager fees. The 'H' share is a very good performer.

You will also see that the hot money is going into a select number of Managers, but that will become self-evident if you check the web links.

Good luck.

Edit: Formatting looks bad, sorry. Clubfinance refund the most commission so I also get an annual £1k cheque to go with the tax free divs.

paulypost

Thanks enator and (for the record) I'll take advice from anyone with no vested interest. My IFA is due at 2 pm so I suppose my morning is allocated to due diligence! Thanks again especially for the links.