Hargreaves Lansdown has launched a new online venture capital trust (VCT) investment service following tax hikes introduced in last month’s Budget.
The new service will begin by offering five VCTs, which includes two AIM VCTs from Octopus and its Apollo VCT, Blackfinch Spring VCT and Calculus VCT.
The news comes following a host of tax changes in the Budget, including a hike to capital gains tax from 20 per cent to 24 per cent.
However, profit from VCTs are exempt from capital gains tax when they are sold, while investors can claim 30 per cent income tax relief on VCT investments. Last year, over 26,000 VCT investors claimed income tax relief on £985m of investment.
Meanwhile, fears that AIM stocks would have their exemption to inheritance tax relief abolished have subsided, as only a fifty per cent rate was applied in the fiscal event.
The FTSE AIM 100 index is up almost three per cent since the day before the Budget, leaving AIM VCTs, a common area of focus for the vehicles, eager to invest.
Clients will pay a £50 dealing charge to apply for the service and a further £50 fee to trade VCTs, with no commissions or platform fees from Hargreaves Lansdown.
Popular VCT investment service Wealth Club was launched by former Hargreaves Lansdown staff in 2018, including former Hargreaves director and current Wealth Club chief executive Alex Davies.
“After the commitment made by the government to extended VCTs to 2035, and given the tax changes announced in the Budget, VCTs are a great way for people to invest their money in a tax-efficient way, over the longer term, as part of a diverse investment portfolio,” said Emma Wall, head of platform investments at Hargreaves Lansdown.
“Using our market leading position and scale, our VCT service has the potential to help the VCT market grow in the future, delivering favourable returns for investors, and support more businesses at the start of their growth journey.”
“It’s great to see Hargreaves Lansdown coming back to the world of VCTs, offering suitable retail investors the opportunity to access exciting, early-stage private companies,” added Jess Franks, head of investment products at Octopus Investments.