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The Unicorn AIM VCT seeks to provide Shareholders with an attractive return from a diversified portfolio of investments, predominantly in the shares of AIM quoted companies, by maximising the stream of dividend distributions to Shareholders from the income and capital gains generated by the portfolio while maintaining its status as a Venture Capital Trust.
WHAT IS A VCT?
First introduced in 1995, VCTs (Venture Capital Trusts) are companies whose shares are listed on the London Stock Exchange. They invest in unquoted companies, including companies whose shares are listed on AIM (the Alternative Investment Market). Investment in unquoted and AIM companies can carry higher levels of business and market price risk than investment in fully listed companies.
In order to qualify as a VCT the least 70% of the Company’s total assets are to be invested in qualifying investments of which 30% by value must be in ordinary shares carrying no preferential rights to dividends or return of capital and no rights to redemption.
The maximum size of company in which the VCT can invest new money is £15m, prior the fund raising and £16m following.
To date, over £4bn has been raised by over 100 VCTs: VCT assets have funded over 1,000 growing UK companies.
There are some material tax benefits available to UK residents who invest in new ordinary shares in VCTs. While clearly attractive, these tax benefits should not over-ride the importance of investing in sound companies. Investment in VCT shares should only be made taking a long-term view. Because VCT shares must now be held by a UK investor for not less than five years in order to qualify for the tax benefits, the secondary market in VCT shares can be restricted.
The tax benefits currently include the following:
Income tax relief at the rate of 30% on the amount subscribed up to £200,000 in a tax year. To qualify, the shares must be held for not less than 5 years from the date of issue. If they are not, any tax benefits claimed must be repaid.
An investor who acquires shares with a value of up to £200,000, whether by subscription or purchase from another shareholder, will not be liable to income tax on dividends paid on those shares.
Relief from capital gains tax on the disposal of the shares.
Levels and bases of reliefs from taxation are subject to change and the value of any relief depends on an investor’s individual circumstances. Inland Revenue law and practice can change over time, and investors who are unsure as to their tax status should obtain independent advice from a professional adviser such as a solicitor, accountant, stockbroker or independent financial adviser. The information on this page is believed to be correct at the time of writing (September 2014).
Independent commentary on VCTs can be found at:
Please click here for regulatory and company secretarial information the Unicorn AIM VCT alternatively please contact Chris Hutchinson on 020 7253 0889.
Direct link to VCT historic dividend payments: