VCTs

[spinyffud]

I'm a higher tax earner. I have an NHS pension and am likely to reach my maximum lifetime allowance well before retirement. I fill my ISA allowance each year, own a buy to let and am now looking at other tax efficient ways of saving. Has anyone any suggestions or experience of VCT? The principle appeals as a long term saving pot.

What are your appetite for risk and capacity for loss like? Have you considered the tax advantages of an Investment Bond?

Unless you can afford to lose it, don't bother. It's a 'cherry' on top of a strong portfolio and very very few make money.

I also think an investment bond would add a new dimension and offer tax deferred benefits, IHT planning opportunities and good income flexibility.

You can use open architecture or something more traditional. I wouldn't be tempted with off shore unless you have a very strong reason to.

I would also think about a GIA (general investment account) as the first 5k of dividend income is now tax free. Reinvest or kick out via natural income.

If you have spouse is it worth getting more in their pension? Family based finances tend to be tax more tax efficient.... it's all on the table if you split so 'mine' and 'theirs' doesn't work anyway.

Why not speak to a well qualified IFA? You might find they can bring something to the party. Just don't use any contracts that contain exit fees (naming no names).

It was my IFA that suggested VCTs.

It was octopus titan that I was looking at.

I'm not a fan. The last few I've seen have all lost money. I always think they're great in theory, but the reality is not so great. They are HIGH risk, unless you're a 9 out of 10, and you have done ALL the vanilla stuff, my opinion is your IFA is trying to be too clever.

I notice you say higher rate tax payer, not additional rate. You don't earn enough to make the tax play worth a punt IM(brutal)O.

Sorry- I am just into the additional tax rate bracket!

Just, still doesn't swing it for me

More seriously are you a high risk investor? I do not count these as long term savings vehicles and I don't think, for that purpose, they are right.

To be fair without asking LOTS more questions, for which this isn't the right place, real, advice isn't really possible. I would suggest a second opinion from another IFA.

Octopus are very reputable, ask questions of your adviser and read the brochure.

They carry extra risks but are useful for people in your financial situation