Regulation  

VCT rules to be overhauled in Budget

Such trusts, according to Mr Hollands, tend to want the predictability of revenue that asset-backed investments have, so they can know what level of income will be available when the trust disbands. 

Ben Yearsley, a director at Shore Financial Planning, said: “From an advisory standpoint you really needed to be guided by manager and VCT board.

"If they think there is a risk then it is incumbent on them to either not raise money or raise an amount that can be sensibly invested under more restrictive rules."

Yesterday (19 September) research by the Association of Investment Companies showed VCTs enable UK businesses to more than double their turnover (an increase of £2.2m per £1 million of VCT investment) and that VCTs’ investment has created 27,000 jobs. 

The AIC’s review shows that 54 per cent of all current VCT investee businesses have been held by those VCTs for longer than five years, while 20 per cent of all businesses have been held for longer than 10 years. 

david.thorpe@ft.com