YFM’s Dave Hall speaks to FT Adviser on VCTs use in inheritance planning

29 January 2020

YFM’s Dave Hall speaks to FT Adviser on VCTs use in inheritance planning

Investors turning to VCTs for inheritance plans

Venture capital trusts’ steady income streams mean they are being increasingly used for intergenerational wealth planning despite their lack of inheritance tax benefits, David Hall has said.

Mr Hall, managing director at YFM Equity Partners, said more investors in the firm’s VCTs and private equity funds had been looking to use the vehicles as a means of inheritance planning.

He said: “Some of the things our investors have been doing in terms of using VCTs and private equity vehicles as part of their intergenerational planning are quite interesting.

“We surveyed our investors about their plans for their VCT shares, largely because a significant proportion of our investors had held their shares for more than 10 years – some for 15 years – and had started investing in their late 50s and early 60s.

“Some five per cent or so of our investors at the time were over 80, so we wanted to know their plans. We needed to know whether we had enough money for buy-backs, for example, so the survey aimed to find out their intentions so we could plan.

“To our surprise, 32 per cent said they wanted to pass on their shareholdings to the next generation, either children or grandchildren.”

He said this was notable, as VCTs themselves are not inheritance tax efficient, as they form part of an investor’s estate…

Read the full article by Simoney Kyriakou on the FT Adviser website.

 

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