From Octopus Investments.
George Osborne’s 2014 Budget was one of the most significant ever for savers and investors – so here are answers to some of the key questions advisers have been asking us so far.
How will the stricter EIS and VCT rules affect Octopus products?
After the Finance Bill receives Royal Assent, renewable energy companies that receive Renewable Obligation Certificates will no longer qualify as new EIS or VCT investments.
- The change will not be retrospective so it does not affect previous investments or anyone investing in the latest tranche of Octopus EIS before the closing date of 26 March. We are also considering opening another EIS tranche after 26 March, which we will invest before the Finance Bill receives Royal Assent.
- The Octopus Eureka EIS Portfolio Service, our VCTs and the Octopus Inheritance Tax Service won’t be affected by this change.
What will happen with Octopus EIS after this change takes effect?
Our investment team is experienced in adapting to changes made by successive governments. We expected that a new policy would be announced at some point and have been exploring other EIS-qualifying investment opportunities for some time.
How will the change to VCT dividend payments affect investors?
The restrictions on VCT dividends only apply to shares issued from 6 April 2014, so they do not affect existing shareholders in our VCTs. This change ensures all VCT shareholders are treated fairly and that VCTs remain attractive for investors.
Will the option to hold VCT shares in a nominee account make a real difference to investors?
This change is great news as it means advisers and investors can buy new VCT shares through platforms. We were already in discussion with a number of platforms and will keep you updated.
What opportunities are created by the changes to ISAs and pensions?
It’s pleasing to see the government showing increased commitment to ISAs. And the changes to pensions – particularly the ending of the requirement to buy an annuity – will give investors more flexibility in how they plan for retirement. We look forward to working with advisers as they help clients take advantage of the options that will now be available to them.
Want to know more?
If you have any questions, please call us on 0207 768 0041 and we’ll be delighted to help.
