Uk Financial Planning

Front 1

Fixed Interest Investments

Back 1

Medium/Low Risk
Income taxed at 20% for Basic Rate Taxpayers
Spread of risk and growth potential if interest rates fall

Front 2

Pension Contributions

Back 2

Tax Relief of 22% on Contributions
25% Tax Free Lump Sum on Retirement.

Front 3

UK Bank and Building Society Accounts

Back 3

Capital is low risk with variable interest rates
Tax Deducted at source at basic rate of 20%
Cash investment type
May be able to reclaim all or part of tax depending upon total income in tax year
May be able to request income be paid gross if non tax payer

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Offshore Bank and Building Society Accounts

Back 4

Capital is low risk
Variable Interest rates
No tax deducted on interest though fully taxable at lower rate of 10% or savings rate of 20% depending on level of total taxable income.

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With Profits Investments

Back 5

Low/Medium Risk
Potential for Capital Growth
Income & Gains within funds taxed at 20%
No further tax liability for basic/non tax payers

Front 6

ISA (Cash component)

Back 6

Capital is low risk
Variable interest rates
Tax Free Income
Open to UK Residents over 16
Maximum Investment £3000 per annum

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National Savings & Investments Certificates

Back 7

Guaranteed Return of Capital
Inflation protection over fixed term
Tax Free proceeds
Maximum investment £15,000 per issue.

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ISA (Stocks & Shares component)

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Medium Risk Investment
Potential for long term growth but can vary
Tax Free Income & Gains
Open to UK Residents over 18
Maximum Investment -
Maxi ISA (£7000 per annum less amount in Cash component)
Mini ISA - £4000 per annum

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Units Trusts/OEICs

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Spread of risk and potential for growth
Medium risk (equity funds)
Subject to Capital Gains Tax
Open Ended Investments
10% Tax Credit on Equity based dividends
Further 22.5% due for higher rate taxpayers
20% Tax Deducted at source for Fixed interest (Bonds/Gilts)
Further 20% due for higher rate taxpayers

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Investment Trusts

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Lower Annual Charges Than Unit Trust/OEIC
Potential for higher returns than Unit Trust/OEIC
Lower Risk than Individual Shares
Setup as Companies on London Stock Exchange
Closed Ended Investments
Can Borrow Funds (Gear) to Invest
10% Tax Credit on Dividends
Higher Rate Taxpayers due further 22.5%
Subject to Capital Gains Tax

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National Savings & Investments Income & Pensioners Bonds

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Max Investment - £1 Million
Secure Capital and Income
Income could vary on income bonds
Paid Gross but subject to 20% tax for basic rate taxpayers