Deadline looms for VCT EIS investors
With a surge in applications for EISs and VCTs, many funds could close before the April 1 deadline, according to David Scrivens.
The director of Hertfordshire-based discount broker Clubfinance said: “Capacity this year for VCTs is tighter than in previous years, which coupled with an increase in VCTs’ popularity means that many offers are likely to close well before the end of the tax year.”
Data collected by the broker and investment platform showed that many popular funds were already well on their way to meeting fundraising targets and likely to close earlier than usual, potentially leaving some investors unable to access their chosen funds.
The Maven Income and Growth 4 has just closed after reaching its fundraising target and Maven Income and Growth has already reached 70 per cent of its quota.
Other VCTs that have also raised a significant proportion of their funding targets include Elderstreet VCT, at over 80 per cent, and British Smaller Companies VCT and VCT2, both at over 40 per cent.
Many AIM VCTs have also raised a large proportion of their target, including Hargreave Hale AIM VCTs 1 (41 per cent) and 2 (42 per cent); Octopus AIM VCT (65 per cent), VCT 2 (55 per cent); and Unicorn AIM VCT (64 per cent).
Investors wanting to benefit from investment in renewable energy EISs need to act fast, Andrew Sherlock, partner at Oxford Capital, has said.
He said: “We now have over £120m invested in renewable energy companies, but the first quarter of 2015 is the last chance to make this sort of EIS investment.”
In his 2014 autumn statement, chancellor George Osborne announced that from April 5 2015 renewable energy EIS investments would no longer be available.
Oxford Capital said it had received advanced assurance from HMRC for its January tranche, which is focused on electricity generation from agricultural anaerobic digestion, which means investors are assured of receiving EIS benefits, rather than risk investing in a fund in which tax benefits are not already secure.
Adviser View
Jason Hollands, managing director of business development at Tilney Bestinvest, said that the absence of two market-leading generalist/private equity VCT groups from the market this year has left the fund raisings from British Smaller Companies 1&2 and the Mobeus VCTs in an exceptionally strong position.
He said: “Both are high-quality managers, similarly focused on backing management buyouts at well-established, already profitable, unquoted companies. Contrary to the perception in many quarters, most VCTs do not invest in ‘young’ companies but in long-established firms where the management teams are looking to buy out an incumbent shareholder.”
