This would be an interesting test, wouldn’t it?

Tax-conscious investors could save 30pc on their bill if they transfer their old Isas into a venture capital trust (VCT) before the April 5 deadline.

Listed on the London Stock Exchange, VCTs are investment companies that provide generous tax breaks in return for investing in risky smaller companies.

They offer 30pc tax breaks on any cash invested up to £200,000 in new shares issues by these companies and typically invest in smaller or unlisted companies.

As such they are typically more risky than other investments, although these stocks are also more likely to grow quickly.

That last is nonsense of course. However.

Consider Ritchie’s mantra. Pensions savings don’t go into new investment, they just buy second hand stocks. This doesn’t build the new infrastructure the future needs. Therefore there should be no tax relief. Tax relief should only go to new investment in real stuff.

So, here’s tax relief purely for investment in new stuff.

The test? This is unconscionable tax avoidance or exactly what Ritchie is arguing for?

4 comments on “This would be an interesting test, wouldn’t it?

  1. “Tax-conscious investors could save 30pc on their bill”

    No they couldn’t. They could get an income tax refund of 30% of the amount they invest.

    “if they transfer their old Isas into a venture capital trust (VCT) before the April 5 deadline”

    The source is irrelevant so why mention ISAs? Except that an interest ISA is a pretty rubbish investment vehicle.

  2. All reliefs from tax form part of Murphy’s spurious “tax gap” – the amount of tax that could be collected if all income and gains were subject to taxation without any reliefs. Ideally of course, instead of taxpayers paying tax on their income, the rotund potato head would like the tax charged to equal the income and gains (a 100% tax charge) by direct charge at source through a mandatory government bank account, and for an element to be rebated to taxpayers as a form of UBI+ system (maybe even without the + to reduce inequality).

    As VCT investors benefit not only from income tax relief, but also exemption from capital gains tax on disposal of the shares, I imagine Murphy is positively apoplectic that VCTs and the tax reliefs offered exist at all.

  3. As he believes that any income which could be taxed by a future government is tax avoidance anyway, I doubt he will be sympathetic to this, or at least in public. Privately he might pile into it like a pig into a lake of shit, but who knows.

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