parallellines wrote:Where the two VCTs are near-mirror image ( or as in the case of Hazel, exact mirror image) it could be argued that the sell and reinvest strategy is exploiting a loophole in the legislation. It might be best if the market did eliminate the abuse, so that we don't have even more onerous legislation imposed on us.
Disagree.
Sibling-VCTs have been around a lot longer than the legislation, and the lawmakers were well-aware of them. The cost of sell-one-buy-the-other is sufficiently high to prevent it looking like a substitute Enhanced Buy Back to get round the legislation. Unless and until the VCT stables find a wheeze to work around those costs.
They are arguably a loophole in other legislation: specifically, limitations to a VCT's holdings in an investee. But that's a long-standing thing, and nothing to do with investors trading VCT shares.