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Crown Place AGM (2016)

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
scotia
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Re: Crown Place AGM (2016)

#96164

Postby scotia » November 16th, 2017, 11:51 am

This article in yesterday's Telegraph assigns a 60% chance that the Chancellor will reduce the tax breaks for VCTs:

I'll take your word for it! Even with a 50Mbps link, the delays in this article caused by adverts made it readable only by persons with more determination than I have!
I appreciate that the Chancellor is between a rock and a hard place - and has to increase his tax take somewhere. The VCT tax reduction would have a twofold effect - less VCTs purchased, and less tax relief on the remainder. However it flies in the face of the government's desire to raise more patient capital. But necessity may win over desirability. Anyway - we will soon find out, and if changes are made, doubtless we will discuss it under a new topic heading

Retiringat51
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Re: Crown Place AGM (2016)

#96337

Postby Retiringat51 » November 16th, 2017, 9:26 pm

scotia wrote:I appreciate that the Chancellor is between a rock and a hard place


He certainly ought to have been so, had he invested in Electra Kingsway/Acuity/Foresight/Edge.... the list runs on.... and I very much hope - as he deliberates over whether there is a fair risk/tax-incentive balance under the current regime - that either he was one of those unfortunates, or at least is aware of the plight of those who were, and in some cases remain, stricken by the experience.

There is a good case to be made for reinstating the 40% initial tax relief on VCT subscriptions IMO.


https://youtu.be/ZHtQwxKaofk

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Re: Crown Place AGM (2016)

#96542

Postby BusyBumbleBee » November 17th, 2017, 4:54 pm

Retiringat51 wrote:There is a good case to be made for reinstating the 40% initial tax relief on VCT subscriptions IMO.
https://youtu.be/ZHtQwxKaofk
Why - so the population at large can subsidise the fund managers?

You mention a whole string of managers who have failed to deliver a decent return - that means that they invested in lots of companies that lost everything - not what we as a nation want to happen with our taxes. Could this just be because the managers' interests are simply not aligned with the investee companies and VCT shareholders interests?

I think the chancellor needs to address the issue of fund managers taking-no risks at all. Maybe they should have a review every five years and if they haven't delivered above-average returns they should repay some of the tax relief to the chancellor and the VCT investor. Alternatively they could just play Russian Roulette and one in six can be forced out of business. Or did you hint at this in the video clip link?

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Re: Crown Place AGM (2016)

#96553

Postby Kidman » November 17th, 2017, 5:41 pm

Retiringat51 wrote:There is a good case to be made for reinstating the 40% initial tax relief on VCT subscriptions IMO.

If so, it should have been made during the time for pre-budget consultation.

I am not convinced. I agree with BBB's points and the upfront tax relief is too often used by the fund managers as if they had given it to us by their including of it in various performance statistics. Further, it is only part of the package. VCTs are CGT free and free of income tax on dividends. VCTs have to be kept for at least five years for tax relief and many of us have held for 10 or 20 years. By that time the upfront tax relief has only given us a per cent or two of benefit annualised. 40% income tax relief on 5% divdends is giving us 2% per annum ad infinitum so is potentially a bigger benefit.

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Re: Crown Place AGM (2016)

#96561

Postby Retiringat51 » November 17th, 2017, 6:23 pm

The nations does want to see more SME business investment after all, but I agree there should be skin in the game where there is public money in play.

The banks remain unkeen to lend where the risks are perceived as too great.

The risk is real; "You've got an empty chamber in that gun".

One in six VCTs is a dud. Quite possibly, so in such circumstances being CGT and dividend tax-free is immaterial, and the initial tax relief is the only recompense available to the toe-dipping, soon to be wiped-out investor?

The primary purpose of the tax relief is to incentivise someone to accept the risk. Is 30% sufficient? 20% - or the Russian Roulette odds even??

I grant you that the fund managers also benefit indirectly from the cornerstone of tax incentivisation, and that it is wrong that they should find themselves in an enviable win/win position come what may.

Perhaps your concerns could be addressed legislatively via a cap on fees and/or rebalancing of reward measures akin to your suggestions, but surely not in such a way as to disincentives the risk taking investor?

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Re: Crown Place AGM (2016)

#96702

Postby BusyBumbleBee » November 18th, 2017, 11:00 am

Retiringat51 wrote: ... One in six VCTs is a dud. Quite possibly, so in such circumstances being CGT and dividend tax-free is immaterial, and the initial tax relief is the only recompense available to the toe-dipping, soon to be wiped-out investor?

The primary purpose of the tax relief is to incentivise someone to accept the risk. Is 30% sufficient? 20% - or the Russian Roulette odds even??

I grant you that the fund managers also benefit indirectly from the cornerstone of tax incentivisation, and that it is wrong that they should find themselves in an enviable win/win position come what may.

Perhaps your concerns could be addressed legislatively via a cap on fees and/or rebalancing of reward measures akin to your suggestions, but surely not in such a way as to disincentive the risk taking investor?

You make some good points, RetiringAt51, However, I question the 1 in 6 - more like 2 or 3 in six over the past 20 years. A cap on fees (including what they take from investee companies often another 1 to 2% per year)) would be very good and agreed they should not disincentive the risk taking investor.

But they should disincentivise the investor who has jumped on the bandwagon this year cos VCTs seem a ticket to easy money : as someone said when the taxi driver talks about VCTs you know they have peaked.

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Re: Crown Place AGM (2016)

#117925

Postby Karellan » February 13th, 2018, 5:10 pm

Reduction in share capital and cancellation of capital redemption and share premium reserves

https://www.investegate.co.uk/crown-pla ... LC%20Alert

I am never sure whether these things are good or bad in the long run. We can expect new certificates soon.

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Re: Crown Place AGM (2016)

#117954

Postby Karellan » February 13th, 2018, 7:15 pm

Karellan wrote:I am never sure whether these things are good or bad in the long run. New share certificates will not be issued following these changes and existing certificates will remain valid.


Apologies , I quoted it around the wrong way first time.

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Re: Crown Place AGM (2016)

#175016

Postby BusyBumbleBee » October 19th, 2018, 2:31 pm

Is anyone going to this year's AGM?


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