Venture Capital Trusts  

Seneca to enter VCT market

Seneca to enter VCT market

Seneca Partners, a firm specialising in tax efficient investments has revealed plans to enter the venture capital trust (VCT) market.

The Seneca Income and Growth VCT will be launched in the first quarter of 2018, in time for the end of the tax year.

Seneca Partners is based in the north of England and focuses on investments in that part of the world.

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The firm has existing enterprise investment scheme (EIS) strategies.

Richard Manley, managing partner of Seneca Partners, said: "We are long standing Growth Capital investors through our EIS division, which has deployed around £70m in the region's brightest prospects over the last four years and the addition of our VCT will offer investors a different tax advantaged option in an area of substantial strength for Seneca Partners.

“The announcements made in the Budget recently, together with the vitally important Patient Capital Review provide further conviction of the support needed by businesses in our heartlands, a cause we will continue to champion.

"We will maintain our position as generalist investors and key supporters across the Northern Powerhouse which is recognised and valued by our investors from all parts of the UK.’"

VCTs offer investors an upfront income tax break of 30 per cent, if the shares are held for five years.

In addition, any income or capital gains from investments in the trust are exempt from tax.

Francis Klonokski, chartered financial planner at Klonowski and Co in Leeds, is not keen on investing in VCTs.

He said: "I have only ever used them for one client. We talk now about how they are still not at the level he bought them at, until you include the income. So they are not any kind of an investment right now.

"I think it is a good rule that you should never invest in anything just for the tax breaks and it seems to me without the tax breaks most VCTs are losing money."

david.thorpe@ft.com