Tax efficient planning for Barristers
A Venture Capital Trust (VCT) is a listed company, run by a fund manager, that invests in smaller companies that are not typically quoted on stock exchanges. Investments in Venture Capital Trusts carry tax reliefs to encourage you to invest in these smaller, higher risk companies.
By pooling your investments with those of other customers, VCTs allow you to spread the risk over a number of small companies. Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) both encourage investment in qualifying early-stage and seed-stage growth-focused companies by giving investors handsome tax and loss reliefs.
High earners If you have used up your annual or lifetime pensions allowance and your annual ISA allowance, then you may already be familiar with tax efficient investments such as a VCT, EIS and SEIS. Listed below are some other reasons why you might benefit from investing in one of these tax efficient products:
-Offsetting tax on a capital gain
-Selling a buy to let property
-Sheltering investments from inheritance tax
-Selling shares with an IHT problem
-Extracting profits from a business
-Managing chargeable events for single premium investment bonds
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* Annual investment is increased to £2 million provided that anything above £1 million is invested in knowledge-intensive companies. There is no limit on CGT deferral. ^Subscriptions into EIS can be used to defer capital gains (e.g. from selling a property). These gains can be from up to one year before and three years after the investment is made. 50% of a subscription into an SEIS can be taken off your realised capital gain. The SEIS subscription must be made in the same tax year that the gain is realised or the following tax year and then carried back.