Q. What things can I do to make best use of tax planning. I already pay into Venture Capital Trusts, stakeholder pensions, have ISAs. Are there any other similar schemes to think about?
A. Thanks for the question.
One important point to mention is that whenever you are considering investing you should look beyond the headline tax benefits of the plan in question and also consider:
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how risky is the ‘underlying’ investment? (after all, pensions and ISAs etc are tax wrappers, not investments)
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when can you get access to the funds?
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are there any penalties for early access?
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what are the charges?
And once all is considered, does it align with your overall financial plan? For example, you could invest in a scheme that is higher risk however in order to achieve your overall objectives you may only need low/medium risk. As long as you know the latter you can plan with more confidence.
You could also consider a Qualifying Savings Plan (QSP) if you’ve ‘maxed out’ your ISA.
This type of investment is not as tax efficient as an ISA as the underlying fund is taxed, however like an ISA the proceeds are free of tax (with the QSP you have to hold the plan for at least 7.5 years, whereas with an ISA there’s normally no minimum holding period).
If you need more details on the QSP, let me know.
We’ve compiled an Advanced Investment Strategies Guide, which covers:
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Venture Capital Trusts
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Enterprise Investment Schemes
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Film Partnerships
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Alternative Investment Market Shares
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Second Hand Endowment Policies
To get your copy just click on the link (will open as pdf).
I hope this helps!
