The Baronsmead VCTs

Investment securities

Baronsmead Venture Trust invests in a range of securities including, but not limited to, ordinary and preference shares, loan stocks, convertible securities, and permitted non-qualifying investments as well as cash. Unquoted investments are usually structured as a combination of ordinary shares and loan stocks or preference shares, while AIM-traded investments are primarily held in ordinary shares. No single investment may represent more than 15% (by VCT value) of Baronsmead Venture Trust’s total investments.

Liquidity

Pending investment in VCT qualifying investments, Baronsmead Venture Trust’s cash and liquid funds are held in permitted non-qualifying investments.

Investment style

Investments are selected in the expectation that the application of private equity disciplines including active management of the investments will enhance value and enable profits to be realised on the sale of investments.

Co-investment

Baronsmead Venture Trust typically invests alongside Baronsmead Second Venture Trust in companies sourced by the Investment Manager.

The Investment Manager’s members and staff invest in unquoted investments alongside Baronsmead Venture Trust. This scheme is in line with current practice of private equity houses and its objective is to attract, recruit, retain and incentivise the Investment Manager’s team and is made on terms which align the interests of shareholders and the Investment Manager.

Borrowing powers

Should it be required Baronsmead Venture Trust’s policy is to use borrowing for short term liquidity purposes only up to a maximum of 25% of Baronsmead Venture Trust’s gross assets, as permitted by Baronsmead Venture Trust’s articles of association.

No material change will be made to Baronsmead Venture Trust’s investment policy without the approval of Shareholders by ordinary resolution at a general meeting.

Investment securities

Baronsmead Second Venture Trust invests in a range of securities including, but not limited to, ordinary and preference shares, loan stocks, convertible securities, and permitted non-qualifying investments as well as cash. Unquoted investments are usually structured as a combination of ordinary shares and loan stocks or preference shares, while AIM-traded investments are primarily held in ordinary shares. No single investment may represent more than 15% (by VCT value) of Baronsmead Second Venture Trust’s total investments.

Liquidity

Pending investment in VCT qualifying investments, Baronsmead Second Venture Trust’s cash and liquid funds are held in permitted non-qualifying investments.

Investment style

Investments are selected in the expectation that the application of private equity disciplines including active management of the investments will enhance value and enable profits to be realised on the sale of investments.

Co-investment

Baronsmead Second Venture Trust typically invests alongside Baronsmead Venture Trust in companies sourced by the Investment Manager.

The Investment Manager’s members and staff invest in unquoted investments alongside Baronsmead Second Venture Trust. This scheme is in line with current practice of private equity houses and its objective is to attract, recruit, retain and incentivise the Investment Manager’s team and is made on terms which align the interests of shareholders and the Investment Manager.

Borrowing powers

Should it be required Baronsmead Second Venture Trust’s policy is to use borrowing for short term liquidity purposes only up to a maximum of 25% of Baronsmead Second Venture Trust’s gross assets, as permitted by Baronsmead Second Venture Trust’s articles of association.

No material change will be made to Baronsmead Second Venture Trust’s investment policy without the approval of Shareholders by ordinary resolution at a general meeting.

Warning to Shareholders

Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from “brokers” based overseas who target UK shareholders offering to sell them what often turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers for free company reports.

Please note that it is very unlikely that either the Company or the Company Registrar, Computershare, would make unsolicited telephone calls to shareholders and that any such calls would relate only to official documentation already circulated to shareholders and never in respect of investment “advice”.

If you are in any doubt about the veracity of an unsolicited phone call, please call either the Company or the Registrar at the
numbers provided below.

Protect Yourself

If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or
research reports, you should take these steps before handing over any money or share certificates:

1. Get the name of the person and organisation contacting you.
2. Check the FCA Register at www.fca.org.uk/register to ensure they are authorised (or www.fca.org.uk/publication/systems-information/aifmd-small-register.pdf).
3. Use the details on the FCA Register to contact the firm.
4. Call the FCA Consumer Helpline on 0800 111 6768 (freephone) from 8am to 6pm, Monday to Friday (except public
   holidays) and 9am to 1pm, Saturday (from abroad call +44 20 7066 1000) if there are no contact details on the
   Register or you are told they are out of date.
5. Search the FCA’s list of unauthorised firms and individuals to avoid doing business with.
6. REMEMBER: if it sounds too good to be true, it probably is!

If you use an unauthorised firm to buy or sell shares or other investments, you will not have access to the Financial
Ombudsman Service (https://www.financial-ombudsman.org.uk/) or Financial Services Compensation Scheme
(https://www.fscs.org.uk/) if things go wrong.

Report a Scam

If you are approached about a share scam you should tell the FCA using the Share Fraud Reporting Form
(www.fca.org.uk/consumers/report-scam-unauthorised-firm), where you can find out about the latest investment scams.
You can also call the FCA Consumer Helpline on 0800 111 6768.

If you have already paid money (or otherwise dealt with share fraudsters) you should contact ActionFraud on 0300 123 2040 or use the ActionFraud (https://www.actionfraudalert.co.uk/) Online Reporting Tool.

More detailed information on this or similar activity can be found on the FCA website.

Investing in shares in the Baronsmead VCTs can provide a tax efficient form of investment for individuals aged 18 or over who are UK tax resident. Investing in VCTs is high risk due to the underlying investments and the market in VCT shares is illiquid.

The rules governing VCT investments and tax reliefs are complex. You should consider seeking advice from an appropriately authorised and qualified financial or other professional adviser when considering buying or selling VCT shares.

Investment in smaller companies which are unquoted, or traded on AIM or ISDX Markets, by its nature, involves a higher degree of risk than investment in larger companies. Trading in VCT shares is not particularly active, so shares tend to be valued at a discount to their net asset value and may be difficult to realise. As a result, Shareholders may be offered a price which is less than the full value of the underlying assets. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable.

Shares in the Baronsmead VCTs are listed on the London Stock Exchange. New shares are made available through Offers for Subscription. Existing shares can be bought through a stockbroker of authorised dealing service.

Prospective investors should consider carefully the risks associated with this form of investment, and seek advice from an appropriately qualified financial or other adviser.

Investment in smaller companies which are unquoted, or traded on AIM or ISDX Markets, by its nature, involves a higher degree of risk than investment in larger companies. Trading in VCT shares is not particularly active, so shares tend to be valued at a discount to their net asset value and may be difficult to realise. As a result, Shareholders may be offered a price which is less than the full value of the underlying assets. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable.

Buying new shares

You can only buy new shares when one or more of the Baronsmead VCTs offers to issue new shares through an offer for subscription.

 You can register to receive information about the next offer for subscription that is open to the public on this website.
Click here to register for information about Share Offers when they become available

Existing investors will automatically be sent information about offers that are relevant to them.

You can find out more about the tax reliefs available on investment in new VCT shares on this website.

Click here to view information regarding tax reliefs available for new VCT shares

Investment in smaller companies which are unquoted, or traded on AIM or ISDX Markets, by its nature, involves a higher degree of risk than investment in larger companies. Trading in VCT shares is not particularly active, so shares tend to be valued at a discount to their net asset value and may be difficult to realise. As a result, Shareholders may be offered a price which is less than the full value of the underlying assets. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable.

Prospective investors should seek the advice of an appropriately authorised and qualified financial or other professional adviser to ensure an investment in VCTs is suitable, given their personal circumstances and that the VCT tax reliefs are applicable.

Prospective investors should read the sections of the website concerning General Risks, Investment Risks and Tax Related Risks before investing.

Buying existing shares

You can buy existing shares in the Baronsmead VCTs through your stockbroker or authorised share dealing service in the same way as other listed shares.

The prices of shares in the Baronsmead VCTs are shown in the Financial Times and can be found on many financial websites.

You can find out more about the benefits of investing in existing VCT shares on this website.
Click here to view information regarding the benefits of investing in existing VCT shares

Investment in smaller companies which are unquoted, or traded on AIM or ISDX Markets, by its nature, involves a higher degree of risk than investment in larger companies. Trading in VCT shares is not particularly active, so shares tend to be valued at a discount to their net asset value and may be difficult to realise. As a result, Shareholders may be offered a price which is less than the full value of the underlying assets. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable.

Prospective investors should seek the advice of an appropriately authorised and qualified financial or other professional adviser to ensure an investment in VCTs is suitable given their personal circumstances and that the VCT tax reliefs are applicable.

Prospective investors should read the sections of the web site concerning General Risks, Investment Risk and Tax Related Risks before investing.

Comparison of new and existing shares

A summary of the tax benefits available to qualifying investors looking to subscribe for or purchase existing VCT shares is shown in the table below.

*The disposal of new VCT shares within five years of their issue will result in some or all of the 30% income tax relief available upon investment becoming repayable. On this basis, investing in new VCT shares should be considered a long-term investment.

Legislation came into force with effect from 6 April 2014 relating to linked subscriptions and sales of VCT shares which restricts the availability of income tax relief on a subscription for shares in a VCT issued after 5 April 2014 where it is ‘linked’ to a sale of shares in the same VCT. For these purposes, linked means (i) the sale of the shares in the VCT was conditional on the subscription for shares in the same VCT (or vice versa) or (ii) the subscription for shares in the VCT  and the sale of shares in the same VCT were within six months of each other (irrespective of which comes first). If the subscription is ‘linked’, the amount on which upfront VCT income tax relief can be claimed will be reduced by the amount of the consideration of any linked sales.

Qualifying investors are individuals aged 18 or over who are tax residents in the UK. An investor’s annual allowance for VCT investment is £200,000. This covers the acquisition of VCT shares by any means within a tax year.

*Stockbrokers commission is dependent on the mechanism used, the firm chosen and the level of advice, if any, received.

Investment in smaller companies which are unquoted, or traded on AIM or ISDX Markets, by its nature, involves a higher degree of risk than investment in larger companies. Trading in VCT shares is not particularly active, so shares tend to be valued at a discount to their net asset value and may be difficult to realise. As a result, Shareholders may be offered a price which is less than the full value of the underlying assets. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable.

Prospective investors should seek the advice of an appropriately authorised and qualified financial or other professional adviser to ensure an investment in VCTs is suitable, given their personal circumstances and that the VCT tax reliefs are applicable.

Prospective investors should read the sections of the website concerning General Risks, Investment Risks and Tax Related Risks before investing.

View our guide to help you with the sale of shares held in a venture capital trust >>

The nature of investment in VCTs

VCTs are a particular type of investment company.  They were established by the UK Government with the intention of encouraging investment in smaller, or “venture”, UK companies.  Investment in VCTs is high-risk and for the long-term.  Prospective investors should refer to the detailed risk warnings in the relevant prospectus but key risks are set out below.

General risks

The past performance of the Baronsmead VCTs is not necessarily a guide to their future performance. The value of a VCT depends on the performance of the underlying assets. The value of the investment and dividend stream from the Baronsmead VCTs can rise and fall. Shareholders may get back less than originally invested, even taking the tax reliefs into account. There can be no guarantee that investment objectives of any of the Baronsmead VCTs will be achieved.

Risks inherent in investing in small companies

Investment in smaller companies which are unquoted, or traded on AIM or ISDX Markets, by its nature, involves a higher degree of risk than investment in larger companies, including those traded on the main market.  In particular, smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. In addition, the market for shares in smaller companies is often less liquid than that for shares in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such shares.

Investments held by the Baronsmead VCTs may be difficult to realise. The fact that a share is traded on AIM or PLUS-Markets does not guarantee its liquidity. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable. Any change of governmental, economic, fiscal, monetary or political policy could materially affect, directly or indirectly, the operation of the VCTs and/or their ability to achieve or maintain VCT status.

Long-term investment and liquidity risks
An investment in a VCT is for the long term.  VCT shares are not likely to be easy to sell at full value. Trading in VCT shares is not particularly active, so shares tend to be valued at a discount to their net asset value.  In other words, if you seek to sell, you may be offered a price which is less than the full value of the underlying assets.  Mechanisms for the buy-back of shares are explained in the annual reports for the funds, but you should have no expectation that there will be any buy-back or other opportunity to redeem your interest.

Market risks

Investment in unquoted, AIM-traded and ISDX Markets-traded companies, by its nature, involves a higher degree of risk than investment in companies traded on the main market. In particular, smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. In addition, the market for shares in smaller companies is often less liquid than that for shares in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such shares.

Investments held by the Baronsmead VCT’s may be difficult to realise. The fact that a share is traded on AIM or PLUS-Markets does not guarantee its liquidity. The spread between the buying and selling price of such shares may be wide and thus the price used for valuation may not be achievable. Any change of governmental, economic, fiscal, monetary or political policy could materially affect, directly or indirectly, the operation of the Company and/or its ability to achieve or maintain final VCT status.

Tax related risks

The information on this web site is based on existing legislation, including taxation legislation. The tax reliefs described are those currently available. The tax rules or their interpretation in relation to an investment in the Baronsmead VCTs and/or rates of tax may change during the life of the Baronsmead VCTs and any such changes can be retrospective. Changes in legislation concerning VCTs in general, and qualifying holdings and qualifying trades in particular, may limit the number of new qualifying investment opportunities and/or reduce the level of returns that would otherwise have been achievable. The value of tax reliefs depends on the personal circumstances of the holders of the share in the Baronsmead VCTs, who should consult their own tax advisers before making any investment.

While it is the intention of the Directors of the Baronsmead VCTs that they will be managed so as to continue to qualify as VCTs, there can be no guarantee that the Baronsmead VCTs will maintain VCT status. If a company that has been granted approval as a VCT subsequently fails to comply with the conditions for approval, approval as a VCT may be withdrawn. In these circumstances, relief from income tax on the initial investment is repayable unless loss of approval occurs more than five years after the issue of the relevant VCT shares. In addition, relief ceases to be available on any dividend paid in respect of profits or gains in any accounting period ending when VCT status has been lost and any gains on the VCT shares up to the date from which loss of VCT status is treated as taking effect will be exempt, but gains thereafter will be taxable.

Charges and performance fees
Charges and performance fees for VCTs may be higher than Unit Trusts and Open Ended Investment companies.

The role of the Manager
Prospective investors should take their own investment and tax advice before investing in VCTs, based on their own circumstances.  The clients of Gresham House Asset Management Limited (Gresham House) are the Baronsmead VCTs.  Gresham House will not advise any prospective investor on the merits of investing in the VCTs or on their tax position , and nothing on this website constitutes such advice.  Nobody associated with Gresham House is entitled to lead you to believe otherwise.

For further information on VCTs please access the following links:

• Current legislation – The Inland Revenue: http://www.hmrc.gov.uk/businesses/tmaventure-capital-trusts.shtml
• The financial regulator of VCT managers – Financial Services Authority: http://www.fsa.gov.uk
• The VCT industry trade association – The AIC: http://www.theaic.co.uk

To locate:

• An IFA: http://www.unbiased.co.uk
• A Stockbroker – http://www.apcims.co.uk 

When will the next dividend be paid?

The Board of each Baronsmead VCT will, wherever possible, seek to pay two dividends to shareholders in each calendar year.

The ability of each Baronsmead VCT to pay dividends cannot be guaranteed. There may be variations in the amounts and timing of dividends paid. The value of the investment, and the dividend stream from the two Baronsmead VCTs, can rise and fall.

How much have I been paid in dividends?

The full record of your shareholder account is held by The City Partnership (UK) Limited, which is the Registrar for each of the Baronsmead VCTs. This information, including how much and when dividends were paid to you, is available to you online https://gresham-house-vcts.cityhub.uk.com or by telephone.

When contacting City you will need to confirm the address where your shares are registered and your shareholder account details. Please have your Shareholder Reference Number (SRN) to hand. This is shown on your share certificates, dividend tax vouchers and proxy cards.

City’s contact details are below:

Website: https://gresham-house-vcts.cityhub.uk.com
Email: registrars@city.uk.com
Address: The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield, HD4 7BH
Telephone: 01484 240 910

(Lines are open 9:00 am to 17:30 pm, Monday to Friday, excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate.)

What dividends have been paid?

The full dividend histories, in terms of pence per share for each dividend, are shown for the relevant Baronsmead VCT. Click on the link for the Baronsmead VCT you are interested in

Baronsmead Venture Trust
Baronsmead Second Venture Trust

Can I reinvest my dividends?

Each of the Baronsmead VCTs operates a Dividend Reinvestment Plan (DRIP), providing their respective shareholders with the opportunity to reinvest their cash dividends paid by purchasing existing shares in the respective Baronsmead VCT.

As these are NOT new shares issued by the respective Baronsmead VCT, participants will not be able to claim upfront income tax relief in respect of shares bought pursuant to a DRIP. They will, however, qualify for VCT dividend and capital gains tax reliefs available as VCT shares.

Shareholders may participate in the DRIP of the respective Baronsmead VCTs, provided that they do not live in, and are not subject to the jurisdiction of, any country outside the United Kingdom that would require the respective Baronsmead VCTs or the Registrars, who manage the DRIP on behalf of the Baronsmead VCTs, to comply with local government or regulatory procedures or any similar formalities.

However, shareholders will usually have an opportunity under the current rules to make further investments in new shares in the VCT each financial year, which will generally be entitled to up front income tax relief.

How do I stop reinvesting my dividends?

Write to the Registrar to tell them you want to receive cash instead of shares when dividends are paid. However, there is a restriction in place: you can’t elect to change within two weeks of a dividend being paid.

City’s contact details are below:

Website: https://gresham-house-vcts.cityhub.uk.com
Email: registrars@city.uk.com
Address: The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield, HD4 7BH
Telephone: 01484 240 910

(Lines are open 9:00 am to 17:30 pm, Monday to Friday, excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate.)

You can access the latest share price and NAV for each VCT by visiting the Shareholder Information section of each VCT’s profile page on this website, or clicking below:

Baronsmead Venture Trust plc>>

Baronsmead Second Venture Trust plc>>

The share prices of the Baronsmead VCTs are listed on the London Stock Exchange. Share prices are available on many financial websites and prices at the last close of business are shown in the ‘Companies and Markets’ section of the Financial Times.

The City Partnership (UK) Limited is the registrar for the Baronsmead VCTs. Shareholders can manage their own accounts in any of the Baronsmead VCTs through City’s online hub. This enables shareholders to track and manage personal holdings, view their share portfolios, look at prices, implement updates such as changes of address, and get access to historical data.

City will deal with all of your queries with regard to your shareholder account. You can contact City in several ways:

Telephone:

01484 240 910

(Lines are open 9:00 am to 17:30 pm, Monday to Friday, excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate.)

On-line: Gresham House VCTs Investor Hub (cityhub.uk.com)

City’s secure website, hub, allows you to manage your shareholding online. If you have not already done so, you will need to use this service on the hub web site. You should have your CIN to hand, if you are registering for the first time, you will need your access Token to hand.

Email: registrars@city.uk.com

Post: The City Partnership (UK) Limited
The Mending Rooms
Park Valley Mills
Meltham Road
Huddersfield
HD4 7BH

Website: https://gresham-house-vcts.cityhub.uk.com
Email: registrars@city.uk.com
Address: The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield, HD4 7BH.
Telephone: 01484 240 910

(Lines are open 9:00 am to 17:30 pm, Monday to Friday, excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate.)

Investors who hold ordinary shares in their own name can check their holdings on our Registrar’s website https://gresham-house-vcts.cityhub.uk.com. Please note that access to this facility investors will need to quote the reference number shown on their share certificate.

City’s contact details are below:

Website: https://gresham-house-vcts.cityhub.uk.com
Email: registrars@city.uk.com
Address: The City Partnership (UK) Limited, The Mending Rooms, Park Valley Mills, Meltham Road, Huddersfield, HD4 7BH.
Telephone: 01484 240 910

(Lines are open 9:00 am to 17:30 pm, Monday to Friday, excluding public holidays in England and Wales. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate.)

Email: baronsmeadvcts@greshamhouse.com
Telephone: 020 3875 9862

In summary, the tax reliefs available on investment in new VCT shares are:

• Income tax relief of up to 30% on the amount invested in new VCT shares*
• Tax free dividends*
• Tax free capital gains*

*On amounts invested up to £200,000 per person, per tax year, for individuals aged 18 or over who are UK tax payers, acquired by any means.

The disposal of new VCT shares within five years of their issue will result in some or all of the 30% income tax relief available upon investment becoming repayable. On this basis, investing in new VCT shares should be considered a long-term investment.

Legislation came into force with effect from 6 April 2014 relating to linked subscriptions and sales of VCT shares which restricts the availability of income tax relief on a subscription for shares in a VCT issued after 5 April 2014 where it is ‘linked’ to a sale of shares in the same VCT. For these purposes, linked means (i) the sale of the shares in the VCT was conditional on the subscription for shares in the same VCT (or vice versa) or (ii) the subscription for shares in the VCT and the sale of shares in the same VCT were within six months of each other (irrespective of which comes first). If the subscription is ‘linked’, the amount on which upfront VCT income tax relief can be claimed will be reduced by the amount of the consideration of any linked sales.

In summary, the tax reliefs available on investment in existing VCT shares are:

• Tax free dividends*
• Tax free capital gains*

*On amounts invested up to £200,000 per person, per tax year, for individuals aged 18 or over who are UK tax payers, acquired by any means.

There is no minimum holding period for these tax reliefs for investors in existing VCT shares.

VCT tax advantages can be passed to your beneficiaries.

You can either:

• Give your VCT shares to your beneficiaries to potentially reduce the overall value of an estate prior to your death as a potentially exempt transfer*; or
• Bequeath your VCT shares to your beneficiaries through your will.

Individuals who receive VCTs as a gift or as an inheritance can benefit from:

• tax free income
• tax free capital gains

To view a summary of the tax implications of gifting VCT shares click here.

VCT shares in your will

To ensure your executors know what should happen to VCT shares after your death, specific instructions as to who should inherit them should be included or added to a will. Otherwise, as VCT shares are listed, in the absence of any specific intructions executors may seek to sell the shares.

All the time the shares remain in an estate there are no VCT tax advantages and the estate may have to declare the income for tax purposes if dividends are paid on the shares.

The following are possible practical steps VCT investors might take to minimise the time their shares are held in an estate after their death:

• Find all share certificates – sort out replacements if any missing. Please note
  the Registrar will charge fees for replacement share certificates
• Reduce number of share certificates by asking registrar to consolidate certificates. Please note the Registrar will charge fees for consolidating share certificates
• Ensure share certificates are kept in a safe place
• Ensure the executors know where the latest, most up to date version of your
  will is kept

Initial VCT income tax relief & deferred capital gains

In the event of death, initial VCT income tax relief is not withdrawn even if death occurs within a minimum holding period. Any deferred capital gains are extinguished on death.

Inheritance tax

As VCT shares are listed shares they are valued with an individual’s estate and therefore contribute towards its overall value, part of which may be subject to inheritance tax although between spouses is (normally) not subject to inheritance tax. Any deferred capital gains are extinguished on death. There is no withdrawal of VCT income tax relief with respect to subscriptions for new VCT shares if a person dies within the minimum holding period.

Seeking advice

Estate planning can be a complex area and you should seek advice from an appropriately approved and qualified adviser who can provide advice based on your personal circumstances.

Notification of the death of a shareholder

In the event of the death of a shareholder, the person dealing with the deceased shareholder’s affairs should notify the Registrar.

*A potentially exempt transfer (PET) is a gift from one person to another that is not liable to inheritance tax, provided the person making the gift lives for a minimum of 7 years after the transfer is made. If death occurs within 7 years, inheritance tax is payable to the extent that the total of all PETS in the previous 7 years exceeds the nil rate band.

The information on this website is based on existing legislation, including taxation legislation. The tax reliefs described are those currently available. The tax rules or their interpretation in relation to an investment in the Baronsmead VCTs and/or rates of tax may change during the life of the Baronsmead VCTs and any such changes can be retrospective. Changes in legislation concerning VCTs in general, and qualifying holdings and qualifying trades in particular, may limit the number of new qualifying investment opportunities and/or reduce the level of returns that would otherwise have been achievable. The value of tax reliefs depends on the personal circumstances of the holders of the share in the Baronsmead VCTs, who should consult their own tax advisers before making any investment.

While it is the intention of the Directors of the Baronsmead VCTs that the VCTs will be managed so as to continue to qualify as VCTs, there can be no guarantee that the Baronsmead VCTs will maintain VCT status. If a company that has been granted approval as a VCT subsequently fails to comply with the conditions for approval, approval as a VCT may be withdrawn. In these circumstances, relief from income tax on the initial investment is repayable unless loss of approval occurs more than five years after the issue of the relevant VCT shares. In addition, relief ceases to be available on any dividend paid in respect of profits or gains in any accounting period ending when VCT status has been lost and any gains on the VCT shares up to the date from which loss of VCT status is treated as taking effect will be exempt, but gains thereafter will be taxable.

A VCT is a particular type of investment company. They were established by the UK Government with the intention of encouraging investments in smaller, or “venture”, UK companies. Investment in VCTs is high risk and for the long term.

Subject to certain criteria, the VCT and the individuals who invest in them can benefit from various tax benefits. The value of the reliefs depends on the personal circumstances of holders of shares in VCTs. If a VCT loses its status as a VCT, an investor could lose the tax reliefs available on VCT shares resulting in adverse tax consequences for the investor.

• www.bvca.co.uk
• www.theaic.co.uk