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Shore Capital launches high income VCT


Shore Capital, the Aim listed investment banking and asset management group, is launching a new Puma VCT offering high tax free dividends. 

The fund, which offers investors a 30 per cent income tax relief and tax free returns, will provide secured loans to companies finding it hard to raise finance on attractive terms from banks. 

The Puma High Income VCT is to raise up to GBP30m. It intends to pay 7p annual dividend and a ten per cent p.a. tax free running yield on the net investment.

For the qualifying investments, the VCTs will principally provide secured debt to well-run companies which have found that banking terms have worsened since the banking crisis. 

Shore Capital is committed to wind up the VCT after five years (if investors so vote) and returning the capital to investors.

Investor IRR will be 8.5 per cent p.a. if, after five years, only their net investment of 70p is returned (equivalent to 14.2 per cent p.a. gross for a 40 per cent taxpayer), rising to 13.5 per cent p.a. if 100p is returned (equivalent to 22.5 per cent p.a. gross).

Graham Shore (pictured), managing director of Shore Capital, says: “We have devised this VCT to provide high tax free income without taking undue risk. The aim is to meet the need of high rate taxpayers for an attractive income producing investment at a time when top rate income tax is expected to rise and other tax reliefs such as pension contributions are being cut back.  The investment strategy is substantially the same as for our existing VCTs, which has worked well for them.”

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