Chelsea Financial Services has today (3 June) called for enhanced support for venture capital trusts (VCTs) from the next government in a mini manifesto.
It has suggested increasing tax reliefs and raising funding limits for VCT-eligible investments to attract more capital into promising ventures.
The firm said VCTs not only offer clients tax relief and attractive returns but also provide crucial funding for innovative start-ups and high-growth enterprises.
“It looks like we may be entering a higher tax environment to spur growth (almost certainly under a Labour government). VCTs allow investors to access tax relief and potentially attractive returns,” it stated.
“We advocate redirecting pension fund investments towards UK equities, and supercharging investment through VCTs.”
According to the firm, this would create a collaborative ecosystem where firms support the development of emerging industries.
The manifesto has also called for a significant overhaul of current investment regulations to mandate that pension funds allocate a greater portion of their capital to UK-listed equities.
It has proposed that the chancellor should incentivise pension funds to reinvest in UK companies, thus infusing capital into the domestic market. This is expected to improve market stability and drive sustainable economic growth.
“We would like to see a shake-up of rules that could mandate pension funds to deploy more member cash in UK-listed companies. UK pension funds’ exposure to UK equities has been dramatically dwindling over the past 25 years,” the firm stated.
