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Investment guides: Tax

Created:
2 May 2007
Updated:
30 May 2007
Written by:
IC personal finance team

Life’s two great certainties: death and taxes. You can’t do much about the former, but using our guides, you can avoid paying more of the latter than you absolutely need to.

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Three main taxes will affect your investments: income tax on income earned from them, capital gains tax when you sell them at a profit, and inheritance tax when you sell them.

Two investment vehicles commonly use to minimise tax are pensions and individual savings accounts. We compare their respective virtues here.

Rising property prices mean that many more estates find themselves subject to inheritance tax, which is levied at a whopping 40 per cent once the nil-rate band has been breached. So make sure you’ve done everything in your power to make sure your next of kin get your investments, rather than the government. One way to do this is to invest in smaller and unquoted companies; see how to do it in ‘A safe route through Aim’

One way to turn tax to your advantage is to exploit the allowances and tax breaks afforded to certain classes of investment like venture capital trusts. We pick the best in ‘Last chance for tax relief’.

Moving abroad might seem a nice way to retire out of the taxman’s way, but don’t bank on it. Make sure you are clued up: read ‘The long arm of the taxman’.

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