Downing Planned Exit VCT 2 - G Shares - The Tax Shelter Report
Downing Planned Exit VCT 2 - G Shares - The Tax Shelter Report
Downing Planned Exit VCT 2 - G Shares - The Tax Shelter Report
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ShareBuybackPolicy<br />
<br />
<strong>The</strong>CompanywillmakemarketpurchasesofitsownG<strong>Shares</strong>,uptoamaximumannualnumberofG<strong>Shares</strong>equivalentto14.9%<br />
of the total number of issued G <strong>Shares</strong> from time to time. <strong>The</strong> Board intendstooperate apolicyof purchasingG<strong>Shares</strong>that<br />
becomeavailableasdetailedbelow(subjecttoliquidityandregulations).<strong>The</strong>proceedsreceivedbyGShareholdersonthesaleof<br />
theirG<strong>Shares</strong>totheCompanywillbereducedbycostssuchasthemarketmaker'smarginandstockbroker'scommission.<br />
<br />
Sharebuybackpolicy<br />
DiscounttoNAV<br />
Fromlaunchto31December2017<br />
Nil<br />
1January2018onwards<br />
Boarddiscretion<br />
<br />
Fromlaunchto31December2017<br />
<strong>The</strong>CompanywillbuybackG<strong>Shares</strong>inthefirstfiveyearsfromlaunch(to31December2017),atnildiscounttoNetAssetValue,<br />
subjecttoregulationsandhavingsufficientliquiditywithintheCompany.Investorsshouldnotethatincometaxreliefof30%will<br />
berepayableiftheG<strong>Shares</strong>arenotheldfortheminimumholdingperiodoffiveyears;however,thereisnoclawbackofthe30%<br />
incometaxrelieffollowingthedeathofaShareholder.<strong>The</strong>BoardanticipatesthattherewillbelimitedsharebuybacksofG<strong>Shares</strong><br />
within five years because the only sellers are likely to be deceased G Shareholders' estates and those G Shareholders whose<br />
circumstanceshavechanged(tosuchanextentthattheyarewillingtorepaythe30%incometaxreliefinordertogainaccessto<br />
thenetproceedsofsale).<br />
<br />
From1January2018onwards<br />
As stated below, in the section headed "Realisation Plans", after five years the Company will seek to exit from sufficient<br />
investmentsintheGSharepoolinordertoreturnfundstoGShareholderswishingtoexitatthattime.<strong>The</strong>refore,tohelpachieve<br />
thisobjective,duringthisperiodtheBoardwillreservetherightastowhetheritwillundertakeGSharebuybacksandthelevelof<br />
discounttoNetAssetValueitwillundertakeanysuchGSharebuybacks.<br />
<br />
<br />
RealisationPlans<br />
<br />
ItisintendedthatGShareholderswillbegiventheoptiontoeitherexitorretaintheirinvestmentwithinapproximatelysixyears<br />
fromthecloseoftheOffers.<br />
<br />
<strong>Exit</strong>mechanism<br />
ItisintendedthattaxfreecashproceedswillbepaidtoGShareholderswhowishtoexit(netofthePerformanceIncentive,if<br />
applicable)bywayoftaxfreerevenueandcapitaldividendsand/orsharebuybacks(includingtenderoffers).<br />
<br />
Rolloveroption<br />
<strong>The</strong>BoardbelievesthatsomeInvestorsmaywishtostayinvestedforlongtermtaxfreeincome.<strong>The</strong>Board,therefore,intendsto<br />
providearolloveroptionandwillprovidefulldetailsofthetermsinapproximatelyfiveyearsfromthecloseoftheOffers.Inthe<br />
eventthatarelativelysmallnumberofGShareholdersopttorollover,suchthatthenetassetsrolledoverforlongtermincome<br />
would be too low to support the administration costs of the Company, then, in these or other circumstances, the Board may<br />
decidetodistributeallthenetassetsandwinduptheGShareclass.<br />
<br />
<br />
Management<br />
<br />
Manager<br />
<strong>The</strong>CompanyismanagedbytheManager,whoseexecutivesareprovidedby<strong>Downing</strong>LLP.<br />
<br />
<strong>Downing</strong>LLP<br />
<strong>Downing</strong> Corporate Finance Limited was incorporated in 1986 and, since 1991 it has specialised in structuring, promoting,<br />
managing and administering tax efficient products. On 1 June 2011, <strong>Downing</strong> Corporate Finance Limited transferred all of its<br />
businessandemployeesto<strong>Downing</strong>LLP,whichisauthorisedandregulatedbytheFinancialServicesAuthority.<strong>Downing</strong>LLPis<br />
responsibleforthemanagementofover£210millionacross16<strong>VCT</strong>s.<br />
<br />
<br />
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