Insight Diversified Target Return Fund (29/10/08) On page 34 of Viewpoint 22 we profiled the Insight Diversified Target Return fund. It has today been announced that the managers of this fund have resigned. We have since moved this fund to a hold rating whilst we assess the new manager....
VCTs invest in a portfolio of unlisted or AiM companies (or both) in order to aid their development into a successful business and realise gains for investors.
A Qualifying Company Must:
Invest at least 70% in qualifying securities within three years.
Invest at least 30% in ordinary shares within three years and at least 10% of each holding must be in these shares.
Derive its income wholly or mainly from shares or securities.
Have no holding in one company representing more than 15% of the portfolio's overall holding.
Quote its ordinary share on the London Stock Exchange.
Retain no more than 15% of its income.
Have no more than 50 full-time employees at the time of investment.
A Qualifying Holding Must:
Invest in unquoted or AiM companies.
Invest in companies with gross assets of no more than £7m before the VCTs investment and £8m after.
Receive no more than £2m of VCT or EIS investment in any 12 month period.
Have no holding in one company representing more than 15% of the portfolio's overall holding.
Quote its ordinary share on the London Stock Exchange.
Retain no more than 15% of its income.
VCT Share Classes
New Launch shares are simple and clean but have no track record and the portfolio takes time to establish.
Top-Up shares offer participation in a mature portfolio with a clear track record. However, availability may be restricted.
'C' or conversion shares separate newly purchased shares from existing shares to prevent NAV and return dilution for existing shareholders. These shares do not participate in returns until the shares are converted.
VCT Taxation 2007/2008
The maximum investment is £200,000.
Income Tax relief is at 30%.
All dividends are free of income tax.
All gains are free of capital gains tax.
Gains within the VCT are free of Corporation Tax.
Tax benefits require a five year holding period.
Please take the opportunity to visit our VCT page which has all of the latest information and discounts.
Risk Factors
Please note that a failure by the manager to meet the qualifying requirements for a venture capital trust could result in the loss of any tax relief that may be available.
Investments in unquoted, AIM-traded and OFEX-traded companies by their nature involve a higher degree of risk than investment in the main market. In addition, the market for stock in smaller companies is often less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock.
Investors should be aware that the sale of new shares in a VCT within five years of their subscription will require repayment of the 30% income tax relief available upon investment to the extent of the amount received from such a sale. Hence, an investment in a VCT is not a short or medium term investment.
The past performance of the VCT and/ or investments managed by the Investment Adviser should not be regarded as an indication of the future performance of the VCT.
The value of shares within a VCT may go down as well as up and shareholders may not receive back the full amount invested.
The secondary market for shares in VCTs is limited so you should consider your investment as long term. You may find it difficult to sell your VCT shares after five years as there may be a shortage of buyers and trading in the shares may be at a discount to their Net Asset Value (NAV).
Whether or not a VCT is profitable, it will need to meet certain fixed costs, including organisation expenses, ongoing administrative and operating expenses.
Chelsea Financial Services plc is authorised and regulated by the Financial Services Authority and offers an
execution-only service. We give no individual investment advice and act only
on instructions received. For further information, please read our Terms and
Conditions and the important notice below.
Important Notice
Past performance is not necessarily a guide to the future. The value of investments and the income from them can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. All products purchased through Chelsea Financial Services should be regarded as medium to long-term investments. Chelsea Financial Services offers an execution-only service. If you require investment advice you should contact an expert adviser. Tax assumptions are subject to statutory change and the value of tax relief (if any) will depend upon your individual circumstances.
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who are United Kingdom residents for tax and investment purposes. It is not
for distribution in any other jurisdiction, including the United States of
America. Anyone who is not a UK resident should not continue with this site
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informational purposes only.
