Investing in Venture Capital Trusts to remove my CGT liability?

by Readers Question

14:19 PM, 24th February 2020
About 8 months ago

Investing in Venture Capital Trusts to remove my CGT liability?

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Investing in Venture Capital Trusts to remove my CGT liability?

I have just sold a rental property and will be liable for Capital Gains Tax after taking in to account the various tax breaks.

I understand the rate payable will be 18% or 28% depending on my other total income.

I was wondering if I became a NIL rate taxpayer by investing in Venture Capital Trusts whether this would remove my CGT liability.

Grateful for any thoughts.

Adrian

 


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Neil Patterson

14:22 PM, 24th February 2020
About 8 months ago

From Mark Alexander:

"Dear Adrian

The answer is no, because your capital gain is treated as income to determine whether you will pay 18% or 28%. Therefore, even if you have no other income, the capital gain itself will still be taxable."

Doug Ellison

8:06 AM, 25th February 2020
About 8 months ago

Some time ago vct’s could be used to defer cgt (I used this option myself)but this was removed several years ago.There are other ways to defer cgt,Eis schemes are probably the most well known.Be careful though,choose the wrong scheme and you would have been better off paying the tax!!

Mick Roberts

15:27 PM, 25th February 2020
About 8 months ago

I have some VCT's and my understanding is, the 30% tax relief u receive back is only if u have paid the equivalent amount in £’s in income tax. So to claim maybe £12,000 back from 30% of £40,000 VCT purchases, u must have paid £12,000 tax, no matter what your tax rate ie. 20% 40% etc.
Don't think Capital gains is allowed.

Doug Ellison

20:29 PM, 25th February 2020
About 8 months ago

You are correct Mick


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