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Investment Overview

Equity based investments do not afford the same capital security as a deposit account. The levels, bases and reliefs from taxation are subject to the individual circumstances of the investor and may be subject to change.

This at-a-glance guide is designed to give you a quick snapshot of a range of different investment vehicles available.

It is important to note that the value of investments and income from them may go down. You may not get back the original amount invested and the levels, basis and reliefs of taxation are subject to change. This is not intended as an exhaustive guide.

Investment Overview

Asset-backed investments can be held in:

Shares

  • Issued by companies to raise money
  • Dividends related to profitability
  • Potential Capital Gains Tax on realised gains when shares sold

Gilt-edged Securities

  • Government guaranteed
  • Fixed rate of interest or coupon
  • Interest liable for tax
  • Full nominal value repaid at redemption date
  • Some Gilts index linked
  • No Capital Gains Tax on Gilts

Unit trusts

  • Investors’ money pooled to form large funds
  • Medium to long-term investments in stocks and shares
  • Broad spread for greater security
  • Professional fund management
  • Units priced on the basis of the value of the underlying investments
  • Income distributed or re-invested
  • Income liable for tax
  • Potential for Capital Gains Tax

Cash ISA
The overall limit for a Cash ISA is now £20,000 with the ability to transfer Stocks and Shares ISAs into a Cash ISA and vice versa.

Stocks and Shares ISA
With a Stocks and Shares ISA you can invest the full £20,000 per year, The Stocks and Shares ISA must include a stocks and shares element. The overall limit at which you can invest in a Stocks and Shares ISA has been raised to £20,000 per year.

Investors do not pay any personal tax on income or gains, but ISAs do pay tax on income from stocks and shares within the funds.

Tessa Only ISA
Anyone who held Tessas will have previously converted these to TOISAs, these are no longer available and have been replaced by ISAs.

Investment trusts

  • Pooled investments run by limited companies
  • Medium to long-term investments
  • Professionally managed
  • Income and gains liable to tax
  • Stock market determines the price so shares can trade at a discount or a premium to the underlying asset value
  • The funds are ‘closed-ended’

Open ended investment companies (OEICs)

  • Pooled investments run by limited companies
  • Medium to long term investments
  • Professionally managed
  • Income and gains liable to tax
  • Single pricing based on the net asset value
  • Charges expressed separately
  • The funds are ‘open-ended’

Investment bonds

  • Single premium (i.e. lump sum investment)
  • Non qualifying life assurance policy
  • Medium to long-term investments
  • With profit or unit-linked
  • Withdrawals possible
  • No personal liability for basic rate Income Tax or Capital Gains Tax
  • Withdrawals may trigger a liability to higher rates of tax or the loss of age allowance for the over 65s

*These products and services are not regulated by the Financial Conduct Authority.

Deposits may be held in:

  • Commercial banks
  • Building societies
  • ISAs

National Savings and Investments have a number of different instruments*:

  • Fixed Interest Savings Certificates
  • Children’s Bonus Bonds
  • Fixed Rate Savings Bond
  • Income Bonds
  • Investment account

The Financial Conduct Authority does not regulate National Savings products.

The value of your investment can go down as well as up and you may get back less than you invested. Tax concessions are not guaranteed and may change.

This article (Investment Overview) is intended to provide a general appreciation of the topic and it is not advice. For more information please contact Moscrops Financial Planning on 0161 761 2534 or email info@moscropsfp.co.uk and we will be happy to assist you.

Article expiry: 05 Apr 2018

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