This could be a record year for Venture Capital Trusts (VCTs). Amati has led the way with their raise of £40million within a week in early August. The demand for VCTs looks greater than ever before.
This is not surprising with the 30% income tax relief on investments, and the tax-free dividends they produce, making it a highly attractive way of supplementing income, particularly as a pension supplement.
In recent months GrowthInvest has developed the most comprehensive VCT service for advisers.
Portfolio diversification is just as much the key for VCTs as any other investments. The GrowthInvest platform is whole of market, providing access to all currently open VCTs. This means that it is a great place to build a mixed portfolio of VCTs for your clients.
Investing into a diversified portfolio has historically been difficult to achieve and has come with a plethora of forms to complete, lack of certainty around allotment and a lack of consolidated reporting on portfolio performance. Alongside this, paper share certificates held by the client are costly to replace, dividend cheques sent to clients can be misplaced and access to the secondary market, if the client requires liquidity, is difficult to achieve.
The world has changed!
GrowthInvest provides a service to access a portfolio of high quality VCT providers, digitising the application and administration processes, providing you with granular online reporting which includes tax reliefs and real time performance analysis across all underlying VCT investments.
GrowthInvest provide all forms needed by all product providers, including ID checks.
The GrowthInvest service goes far beyond set up. All investments are held by secure third party custodians, and dividends will flow into your client bank account. Client portfolios are available to view in our secure online portal, along with all other documentation.
The same servicing is available for legacy VCT investments or portfolios. It offers clear ‘life-to-date’ reporting, and visible 5-year holdings should a client want to sell into buybacks or secondary liquidity, perhaps to reinvest to benefit from the 30% tax relief again.
VCTs in financial planning
As well as the obvious benefits of using VCTs in financial planning, for the tax reliefs, and the opportunity to build long-term tax-free income, there is another use of VCTs that is often overlooked. It is a VCT ISA Transfer.
Very simply it means moving funds from an existing ISA product into a VCT vehicle. It enables clients to obtain the benefit of the VCT tax reliefs without using any new money or using their ISA allowance for the current tax year. Any growth or income remain tax free, as the money is still held in the ISA wrapper.
Check out the simplicity for yourself.
If you are interested in offering VCTs to your clients, but without the hassle of sorting research, diversification, complex reporting and too much paperwork then the GrowthInvest platform is probably for you.
We would like to invite you to have a free online demo of how it can work for you, and help you offer a superior service to your clients, simply and efficiently.
Simply click HERE to email us and request your free online demo.