Tax Efficient Investing – A Brief Guide

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Investing is something that millions of people, all over the world, get involved in. Anyone with a pension scheme through their employer in the UK is probably invested without knowing it. But why do people invest? It’s simple – to seek investment returns through growth and dividends to protect the value of your money! However, there are also a number of points and factors you need to consider before you invest any kind of money. Tax, for one thing, can affect how much you invest on occasion, as well as how much you can expect to get back. Tax also dictates how you draw an income from your investments. Tax efficient investing, however, is completely possible. What’s more, our experts are here to help you find the best possible avenues and opportunities to get started.

Here at Milestone Financial Planning, we’re proud to offer a variety of investment choices which should not only help make your money work harder, but we can structure your investments and income from those investments in the most tax efficient way. If you’re interested in investing and want to know how to capitalise on your cash without unnecessary high expenditure, do make sure to read on and give us a call for more information.

Here are just a few ways you can invest efficiently with regard to tax and other levies.


ISAs and Other Savings

An ISA is likely to be one of many common savings account types you will find while looking around. In fact, a basic or flexible ISA is likely to be one of the best tax efficient investing options available to you. At Milestone we advise on Stocks and Shares ISAs, ensuring that you money is invested in a bespoke way to suit your needs. Any growth on the investment or dividends paid within the ISA are tax free. You can also take an income or money out of your ISA tax free.


Private Pensions

Following the automatic enrolment rules, if you are employed then you probably have at least one personal pension scheme. Savers are encouraged to put money into pensions by the government giving tax relief on contributions. Your employer will also match your contributions to a certain level, some offering more than others as an incentive to attract the top talent. Following pension freedoms, we encourage our clients to think of their pension savings as an invested pot of money that they can’t touch until they’re at least 55. In retirement we help clients plan for their income needs and expenses – including those dream holidays or home abroad you’ve worked your whole life for. It is important to plan for your retirement as early as possible and seek expert advice to ensure that your pension savings are invested in a fund suitable for you and your retirement objectives.

Our financial advisers at Milestone will help you find the most suitable pension investment options for you in the long term and constantly review those investments to ensure your money continues to be invested in the right place in light of wider economic factors. As there are so many different pension options out there, it can be a little tricky to find a solution that suits your lifestyle and needs. Our advisors will always be on hand to help you find the best routes for your pension savings.


EIS and VCTs

Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT) are both HMRC approved ways to save or defer Capital Gains Tax. They work by encouraging investment in smaller companies and those companies who specialise in technology. These are quite specialist investments, appropriate only in specific cases. If you are aware of a large Capital Gains Tax liability in the near future then contact us so that we can discuss these types of investments, and others, in detail.


Business Relief and Entrepreneurs Relief

Business relief applies when calculating the amount of Inheritance Tax due on certain businesses or shares of a businesses. Entrepreneurs Relief can reduce the Capital Gains tax due when a business is sold. Again, both of these reliefs can be planned for and involve detailed conversations with prospective clients. Feel free to get in touch to find out more.


Is Tax Sensitive Investment Legal?

A quick Google search will reveal lots of horror stories about clients who have lost money investing in bizarre and unregulated investments through unscrupulous advisers. Unlike some financial advisers, at Milestone we only deal with regulated investments and tax wrappers which are approved by the HMRC. This way we can ensure that clients have the full protection of the Financial Services Compensation Scheme in the very unlikely event that something goes wrong. If you’re looking for professional, courteous and conscientious advisers then we are for you.

We work with our clients, building trust and long term relationships. We help simply our client’s finances, taking over as much responsibility as they are comfortable with. We meet clients regular to ensure that they are fully informed and prepare cash flow projections and modelling to account for withdrawals, income and investment returns.


Is Investment Complex?

On the outside, investing any kind of money can seem complex – the ebb and flow of the markets, questions like “will I lose it all..!?” – That’s why it is crucial that you make sure you contact seasoned professionals who can work with you to find the most suitable, tailored investments that are constantly reviewed. We proudly offer a free initial consultation to make sure that we are the right fit for you.

Are you planning for retirement, and are looking for tax efficient investment opportunities? Are you in retirement and want to make sure your retirement savings are in the right place and can provide the income you need? Maybe you run your own business, and are looking to ensure that you are using your tax allowances and reliefs? Make sure to get in touch with Milestone Financial Planning on 01246 903053 for a friendly and professional advice service, giving you a safe pair of hands and peace of mind.

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