Question for experienced VCT investors in retirement

RecliningInPeace

When using VCTs as part of a retirement investment/ planning/ income strategy, what tend to be your holding approach?

• Hold long-term and take the tax-free dividend income
• Roll over (into new VCT or same >6 months requirement) every 5 (or >5) years to get renewed tax relief. 
• If you do roll over, will you have less capital to reinvest, so top up from other sources?
• Keep for the minimum 5 years and then sell
• Something else?

Fermion

I've held a number of VCTs over a number of years.
My strategy was to invest typically £10/annum over a number of years in good generalist VCTs with a good exit record/buy back policy. I invested in Foresight4 VCT (now called Foresight Enterprise VCT) and the last one I cashed in Oct 2023 after 5 years performed well, viz.
£10K investment
£3K tax rebate
circa 5% per annum yield tax free
£8402 Net buy back (after discount and HL charges)
I use HL and lodge them within my Fund & Share account as it's easier to manage and control. Also easier at buy back time

Don't invest much in VCTs now due to age (over 75)
(I did also invest in a few EIS investments with less success!)

Gary1984

The only reason I can see for not selling after 5 years if a buyback is available is if you bought them at a discount on the open market. If you want to hold longer term then sell and buy something similar or wait it out for 6 months. These funds aren't very attractive unless you max out on the tax benefits.

RecliningInPeace

Thank you for the replies, @Gary1984 and @Fermion

Fermion, your approach is exactly the plan I have, so it is good to get confirmation it is an approach that has worked for someone.