Wealth Management

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Saving and investing / Tax-efficient saving and investing

Planning your finances for the future can be one of those things that is easy to put off. Our specialist team take away the hassle and deliver tailored financial planning to suit you and your family.

Whether you are looking to discuss investments, pensions, retirement options, life and illness insurance, tax advice or matters related to a business, Ellacotts Wealth Planning team are on hand to take away the stress and give you time to focus on more enjoyable things.

We can show you Tax-efficient ways to save and invest including:

Individual savings accounts (ISAs) allow you to save up to £20,000 a year across different types of ISA. Savings and investments are free from Income Tax and Capital Gains Tax.

General Investment Accounts (GIA) have similar investments to stocks and shares ISAs but there are no annual investment limits. However, gains on investments are potentially liable to Capital Gains Tax and Income tax is due on dividends and interest.

Pensions are one of the most tax efficient investments available as you get tax relief on your contributions at your highest marginal rate. Up to 25% of your fund is available as a tax free lump sum when you retire. You can pass on your fund tax-free if you die before you are 75.

Read more about pensions and retirement planning.

Investment bonds are life insurance policies that aim to provide capital growth or tax-efficient income. You can withdraw up to 5% a year (minus any charges) tax-free. When you cash the bond in, non or basic rate taxpayers don't have any tax to pay. Higher rate taxpayers are liable to 20% tax on any gains made.

Investing in companies

There are 3 tax-efficient ways to invest in companies:

Venture Capital Trusts (VCTs) are high-risk investments offering attractive tax reliefs for investing. You can invest up to £200,000 a tax year but you need to keep the shares for 5 years to get the maximum tax reliefs.

Dividends are tax-free and can either be taken as income or reinvested into the VCT.  There is no Capital Gains Tax due when you dispose of the shares.

Enterprise Investment Schemes (EIS) are similar in structure and risk to VCTs but you only need to hold the investment for 3 years to retain the tax breaks.

The maximum annual investment £1,000,000, with the option to carry an investment back into the previous year.

Investments are exempt from Inheritance Tax after 2 years, as long as the investment is held at death.

The Seed Enterprise Investment Scheme (SEIS) offers tax-efficient benefits to investors in return for investment in small and early stage startup businesses in the UK.  

You can invest a maximum of £100,000 each tax year, which can be spread over a number of companies.

Up to 50% tax relief is available in the tax year the investment is made. The investment must be held for 3 years to fully qualify for the tax reliefs.

Speak to us about devising a saving and investment strategy that works for you.

Related Services

  • Personal tax planning
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