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Why limited-life VCTs can diversify your portfolio

As a key staple of many investment portfolios, Venture Capital Trusts (VCTs) can deliver attractive tax reliefs, in addition to growth and portfolio diversification. Many investors are already aware of generalist VCTs, but limited-life VCTs provide a lesser-known piece of the investment puzzle too.

Limited-life VCTs

Like their longer-living counterparts, limited-life VCTs provide up to 30% upfront annual Income Tax relief[1] as well as tax-free dividends and tax-free capital gains[2]. What’s different, though, is their short lifecycle. Also called ‘planned-exit VCTs’, current limited-life VCTs have a lifespan of around 7-9 years.

The benefits

So why are they useful? In addition to tax efficiency, investors benefit from a defined exit period. A useful aid to financial planning, this clarifies the duration of the investment and its associated tax reliefs, and provides a clear picture of when the VCT will be wound-up.

What’s more, as limited-life VCTs tend to have a stronger focus on capital preservation than evergreen VCTs do, they usually sit at the lower end of the VCT risk spectrum. Combined with added certainty around exit timings, this helps limited-life VCTs deliver important diversification in a portfolio – particularly one with higher risk or multiple shareholdings in the same offer.

Puma VCT 13

At Puma Investments, we have the only limited-life VCT currently open on the market: we recently opened Puma VCT 13 for new investment and it now has just £3m of investment capacity remaining. The minimum investment in Puma VCT 13 is £5,000. It targets average tax-free dividends of 5p per year from 2020 and it’s managed by an award-winning investment team.

If you’re interested in finding out more, visit our VCT page here or contact us on 0207 408 4070 and we’ll be happy to talk in more detail with you.

About Puma Investments VCTs

So far, our 13 limited-life VCTs have raised £230m+ and, more importantly, returned £130m+ in cash to investors. We have a focus on reliability and timeliness. As a recent example, Puma VCT 9’s target exit was six years. We’re pleased to say it entered into members’ voluntary liquidation shortly after its fifth anniversary, having already distributed 75p to shareholders on a 70p net cost of investment.

Find out more

To see whether a limited-life VCT can benefit your portfolio, please get in touch with our Business Development team who’ll be happy to discuss Puma VCT 13 in more detail with you, either by phone or in person. You can call the team on 0207 408 4070 or visit the website here to find out more.    

 

 

Risk Factors

An investment in Puma VCT 13 carries risks and you should take your own independent advice. You should only invest in Puma VCT 13 on the basis of the Prospectus which details the risks of the investment. Below are the key risks:

Past performance is no indication of future results and share prices and their values can go down as well as up. The forecasts in this document are not a reliable guide to future performance. An investment in Puma VCT 13 can be viewed as high risk. Investors' capital may be at risk and investors may get back less than their original investment. Tax reliefs depend on individuals' personal circumstances, minimum holding periods and may be subject to change. It is unlikely there will be a liquid market in the shares of Puma VCT 13 and it may prove difficult for investors to realise their investment immediately or in full.

Legal Disclaimer

This communication is a financial promotion issued by Puma Investments in accordance with section 21 of the Financial Services and Markets Act 2000 (“FSMA”); it is intended for the recipient only and should not be forwarded. Puma Investments is the trading name of Puma Investment Management Limited (FCA no. 590919) which is authorised and regulated by the Financial Conduct Authority.


[1] on investments of up to £200,000 per year when shares are held for at least five years

[2] from the disposal of shares