View from the Bridge
On the Brink of Brexit – October 2019
The UK is set to leave the European Union on 31st of October. All bets are off as to whether it will actually happen, especially when one considers the number of extensions and the never-ending drama unfolding at Westminster. Like me, I am sure many readers are suffering from “Brexit fatigue”. However, it would be remiss to brush the topic aside. Brexit is a known unknown. Whilst it is widely expected to take place, the timing and impact of an eventual deal is less certain. In this edition of View From the Bridge, I explore the potential impact, if any, that the ongoing uncertainty around Brexit could have on the tax-advantaged market. Although I am sure that most of you have been bombarded with Brexit articles from all directions, I hope that this can bring some clarity, and maybe even some reassurance, on the lead up to the 31st October.
The impact which the EU Referendum has had on investor sentiment is perhaps best illustrated by the amount of capital which has been withdrawn from UK markets, in particular equity funds. According to data provider EPFR1, almost $30 billion has been pulled out of UK equity funds since the decision was made to leave the EU, back in June 2016. It is interesting to note therefore, that VCT fundraising figures have seen continuous growth over the same period. According to data released by The Association of Investment Companies (AIC), in the 2018/19 tax year. Venture Capital Trusts (VCTs) enjoyed the second highest fundraise since their creation in 1995, raising a total of £731 million; albeit at only a marginal increase on the year prior.