Investing in tax-efficient ways


11-07-2019
person sitting and working on laptop computer

Sarah Austin of independent financial advice firm Martin-Redman Partners comments on the tax-efficiency of certain investments and how to ensure they are best-suited for your attitude to risk, goals and budget.

There are two main ways to save money in a tax-efficient way, one is through Individual Savings Accounts (ISAs) and the other Pensions. This particular article features on ISAs, to read more on pensions please find our recent article here.

When we provide financial advice to our clients; Stocks & Shares (Investment) ISAs are a key product that we recommend clients hold as part of their investment strategy and financial plan.

Stocks & Shares ISAs (S&S ISA) in a nutshell.

S&S ISAs allow you to invest £20,000 per tax year (which can be split over Cash ISAs and S&S ISAs). An ISA is effectively a ‘tax wrapper’ which shelters your funds from Income Tax on the interest or dividends. Any profits from investments are also free of Capital Gains Tax. This helps your ISA funds grow more quickly and the benefit can significantly affect the amount in your ISA over the years, especially if you are a higher or additional rate tax payer!

Other types of ISA include the Cash, Innovative Finance and Junior ISAs. The Money Advice Service details some other great benefits of ISAs, in addition to their tax-efficiency here which is worth a read.

What types of investments can be held in a S&S ISA?

Many types of assets can be held in a S&S ISA, including:

  • Unit Trusts

  • OEICs (Open Ended Investment Companies)

  • Individual Stocks / Shares

  • Corporate & Government Bonds

  • Exchange-Traded Funds (ETFs)

  • Investment Trusts.

Deciding which assets you hold, and in which proportion, will very much depend on the level of risk you are comfortable taking with your money, along with the length of time you would like to invest it for and one whwew we recommend you contact us for expert independent financial advice.

As your money is invested; it should be thought of as a medium to long term investment and money you aren’t looking for immediate access to, with an emergency fund safely tucked away in a deposit account in case you need quick access to funds.

Other options

Other tax-efficient ways to invest are through National Savings & Investments, Pensions (including SIPPs) and more complex arrangements such as Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EISs) and Seed Enterprise Investment Schemes (SEISs).

We recommend that you take independent financial advice on these products, to understand the possible benefits and drawbacks, to ensure they are best-suited for your attitude to risk, goals and budget.

Arrange a Meeting.

Through a personalised, face-to-face financial review, I can review how you can maximise the tax-efficiency of your existing and future investments – ensuring you don’t miss out on any valuable opportunities and increase the likelihood of achieving your goals.

Please contact me via email sja@martin-redmanpartners.co.uk or call on 01223 792 196 to arrange an introductory meeting, at no cost to yourself. 

About Martin-Redman Partners  

We are a team of experienced Financial Advisers who can advise on your personal or business financial arrangements. We have been building trusted relationships with clients for many years by articulating clear and tailored recommendations in areas ranging from investments to retirement planning, to complex estate planning advice. 

 

We provide independent financial advice on investments, pensions, inheritance tax planning and protection. We work with private individuals, businesses and professional introducers, such as accountants and solicitors, to ensure our clients financial advice needs are met.

Martin-Redman Partners