This is also the time to identify which managers are your preferred choice and start doing your due diligence. The demand and competition for VCTs continues to rise, driven by increasing awareness of their benefits and place in an investors’ portfolio, as well as people looking at them alongside their pension contributions.
As people use their remaining carry forward allowances, the supply and demand issue will increase – so do your due diligence as early as possible, as you need to be prepared and ready for when your preferred offers open. For the most in-demand managers, if their offers are already open, don’t delay, as the most popular ones can become fully subscribed within days or weeks.
IHT: Over the quieter summer months some managers might have promotional discounts on their fees – so keep an eye out for them.
Q4: October to December
EIS: For evergreen growth capital EIS managers there is probably a cut-off within the third quarter, after which they’ll be unable to guarantee to have clients invested before the end of the current tax year. This always provides impetus to help get clients over the line, so fundraising will be starting to increase in the build-up to the first quarter and the end of the tax year.
VCT: Fundraising will be well underway, so the majority of VCTs will be open. For top-ups into existing VCTs you may be able to invest prior to their ex-dividend date; this means clients can sometimes receive a dividend within five months or so of investing rather than wait for a year to receive one (depending on a VCT’s dividend policy).
IHT: For the majority of clients the festive period is one of the few moments that the entire family is together, providing the opportunity for discussion around succession planning.
We often find January is a surprisingly busy time for IHT business as a result.
Q1: January to March
EIS: As already mentioned, with the tax year end fast approaching the crucial thing to check with EIS providers is their timeframes for deploying investors’ money into the underlying investments.
Monies will need to be invested into the underlying EIS qualifying investments before the 5 April for anyone needing carry back to the previous tax year. This often means that evergreen growth capital providers will be unable to help.
This used to be the peak time for structured EIS products which, as already mentioned, are no longer available. It will be interesting to see how advisers respond to this change as it will be the first full tax season without any structured EIS offering.
VCT: As we progress through the first quarter, the best and strongest offers within the VCT market will be closed or soon closing.