Chris Hutchinson is director at Unicorn Asset Management
VCTs
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Pros and cons
Pros
• Access to smaller, unquoted companies can provide the potential for growth
• Generous tax reliefs, such as 30 per cent upfront income tax reliefs, tax-free dividends and no CGT on realised gains
Cons
• Smaller, unquoted companies are higher risk than larger, more established firms
• Minimum five-year holding period to qualify for income tax relief
• Less secondary market liquidity/wider spreads than the average investment trust
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