The Association of Investment Companies (AIC) has applauded chancellor George Osborne for scrapping the £1m limit on venture capital trusts (VCTs).
Osborne’s autumn statement today revealed that the £1m annual investment limit applied to VCTs will be removed to reduce the administrative burdens on the funds.
Annabel Brodie-Smith, the communications director of the AIC, says the association is “delighted” by the move, as it has previously called on the Treasury to abolish the limit.
“It’s a big step towards removing all the red tape affecting VCTs and basically it is going to make investment more efficient, benefiting VCTs themselves and also the small businesses they invest in,” she comments.
Brodie-Smith also predicts that the regime surrounding VCTs will undergo more changes in the months ahead after the consultation on the scheme is completed.
Patrick Reeve, managing partner at Albion Ventures, says the move could result further consolidation in the VCT industry, which he expects to be beneficial.
“With current average size of a VCT at £21.8m, we believe that this could rise to potentially rise to £50m following the removal of this restriction, leading to increased economies of scale and greater diversification – all of which would be good for the retail investor,” he says.
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