TAX EFFICIENT UK INVESTING

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1 TAX EFFICIENT UK INVESTING SAVE MONEY BY MINIMISING TAXES Read this guide to see how you can maximise the returns on your investments and pensions by ensuring that your financial planning strategy is wherever possible based around tax efficiency. Tax acts as a drag on income, it can hold back investment performance and can affect the amount of wealth you eventually pass on to your loved ones. It therefore pays to optimise allowances and tax breaks whenever possible.

2 Why Us? We are expats just like you. We are familiar with the challenges you face when you move to or live in a foreign country. We understand that securing your financial future ranks highly in your list of priorities. You want peace of mind. You value certainty. You seek a reliable financial provider. We We are are affiliated affiliated to Gibraltar s to Gibraltar s oldest oldest legal practice, legal practice, Isolas 1892, Isolas established 1892, established more than 125 more years than ago. 125 We years believe ago. in We the believe positive benefits in the positive that continuity benefits and that close continuity personal relationships and close personal bring. relationships bring. We know you are anxious to make the right choices and take advice from people you can trust. That s exactly how we feel. We understand the importance of building long term relationships and are motivated by a desire to make a real difference to your financial future as well as those of your loved ones. We want to help you achieve your financial objectives by developing a deeper understanding of your requirements and taking a genuine interest in your financial affairs. We established a financial services practice because we are passionate about serving the British expatriate community. We too share your frustrations at the practices adopted by some advisers. We too are determined to challenge the status quo. What we love about our company is that we think and act differently. We have a great desire to change the face of financial services by overcoming the large disconnect that exists between the expectations of the expatriate community and actual service delivery. We want to shake up financial services for expatriates by solving client problems in a more intelligent way. We genuinely want to help people the best way we can. We believe in long term mutually beneficial relationships based on the principle of winwin. If what we have said has touched you deep inside. If you share our beliefs and value our service. If you are interested in working together for the common good. If you feel we are the right company to support you; then please make contact. 2

3 What Do We Offer? We are specialists in helping you create, preserve and transfer your wealth in a tax efficient manner to your loved ones. We offer a suite of products and services all of which support these three key objectives. It s very simple really. We seek to optimize tax efficiency in order to help you build, protect and pass on your wealth to the next generation. ISAs ISA s are a great opportunity to shelter some savings from tax and are particularly advantageous to higher rate tax payers. You can open one type of ISA (cash, stocks and shares or alternative finance) in any tax year and you may also benefit from consolidating previous ISA holdings into one account (ask us about our consolidation service). You must contribute within the tax year, or lose that years allowance which stands at 20,000 per individual for the current year. There are some alternatives to investing in funds, you can hold a cash ISA or invest in a Help to Buy ISA where the Government will pay a bonus which can help towards the purchase of your first home or indeed the new Lifetime ISA which was introduced in April 2017 for investors between the age of 18 and 40 and which again benefits from a Government bonus. Whatever your situation investing in an ISA makes a lot of sense and is a great opportunity to build an extremely flexible, tax free savings pot. Anyone with available funds not committed elsewhere, should seriously consider maximising their contribution each year as a way of building a flexible lump sum which can be used in any number of ways in the future. ISA S ALLOW YOU TO: 1. Build a portfolio of investments within a tax free wrapper. 2. Invest free of capital gains tax & dividend tax. 3. Drawdown free of income tax. 4. Transfer a holding to a spouse or civil partner on death.* *Most ISAs will form part of your estate for IHT purposes CONTACT US CALL US TODAY ON:

4 Investment Bonds Investment Bonds are special products offered by many different life assurance companies and are taxed in a very special way. Whilst there is an onshore option, the preferred option for many is an offshoreversion established in either Dublin or the Isle of Man where you benefit from minimal tax allowing investment returns to roll up gross. Bonds have a unique benefit which is that you can choose to withdraw up to 5% of the initial investment each year without having any immediate tax liability. This can be done for a maximum of 20 years as it is deemed to be return of original capital. The 5% allowance can be carried forward to future years if not required. Gains from bonds are treated as savings income and the tax treatment of bonds can be advantageous for higher rate and non tax payers alike depending on their individual circumstances. A Bond has so many advantages such as: Flexible and tax free income stream. Combine with Trusts for IHT planning. Ability to assign to lower rate tax payer. Great for expats intending to return to UK. IHT and Estate Planning IHT is often considered a voluntary tax as there are a number of ways to reduce or mitigate your potential IHT liability. However with increasing property values it is incredibly easy for your assets to exceed the nil band threshold and for your estate to become liable for 40% tax. Each situation is different and the options can be complicated (but early and effective planning can make a significant difference). Areas you will need to consider are: 1. Making an effective Will. 2. Considering the use of a life policy to cover any IHT liability. 3. Using Discounted Gift Trusts. 4. Gift and loan Schemes. 5. Business property Relief. TALK TO OUR TEAM London Gibraltar Spain Portugal

5 Pension Planning Pensions are a fantastic way of saving for retirement, not only do your investments grow free of income and capital gains tax but your personal contributions can be eligible for tax relief at your highest marginal rate up to a maximum of 40,000 or 100% of your income if lower. It is also possible for non-taxpayers to contribute up to 3,600 and receive relief and in certain circumstances pension contributions can exceed the maximum by sweeping up unused relief for the previous three tax years. You can currently draw benefits from age 55 and receive a lump sum of up to 25% of the accumulated fund free of tax. The remainder of the fund can be used to provide you with an income either via an annuity or the more usually preferred option of taking flexible drawdown payments. Recent changes to legislation have made pensions a potentially significant addition to inheritance tax planning strategies as pension funds can be passed to beneficiaries free of all tax should death occur before age 75 and are taxable at marginal rates of income when death occurs after 75. Pensions have suddenly become a great tool for passing assets tax free across generations. The scope of this bulletin is to give a flavour of some of the tax efficient planning strategies that UK residents can consider. Of course individual circumstances and attitude to risk will be key factors in working out a specific strategy and tax rates can and will change. What we are recommending is that you meet with an adviser to discuss your own specific circumstances and how a bespoke financial strategy can be created for you taking account of any options that are available and suitable for you. After all there is no point in having great investment performance weighed down by unnecessary tax liabilities. 5

6 Many of our clients love our company for being different and have been touched by our passion to make a real difference to people s financial futures Andrew Hosking has been our financial adviser for more than 10 years, so when he introduced us to Fiduciary Wealth at the beginning of 2012 we were more than happy to continue to deal with him. His expert knowledge of pensions and investments has been critical to our retirement planning and he continues to deliver excellent results regularly reviewing our portfolio and re allocating funds. G.M. I was immediately impressed with the company s knowledge and honesty in discussing what I could, and could not do with my Pension Pot. Therefore I decided to ask Fiduciary Wealth to manage it for me. Two years on I can safely say it was probably the best investment decision I have made so far. My portfolio has grown way beyond the standard interest rate and this with a balanced risk portfolio. The service so far has been excellent, the company keeps me regularly informed on the status of my Portfolio. If I have any queries they are dealt with quickly and professionally. I would unreservedly recommend Fiduciary Wealth Management. J.R. It is refreshing to experience good old fashioned personal service from a company that is respected for its integrity, trust and honesty. I have received quality advice. Fiduciary Wealth is a proactive advisor firm that is always seeking the best results for its client in a professional but personal way. Regular reviews of performance and strategy guidance are standard practice along with total transparency so I know exactly how my funds are performing. It is good to know that my investments are in safe hands with a well-established, totally trustworthy wealth management company. G.R. 6

7 Talk to our Team This is your opportunity to have a thirty minute consultation at our expense to discuss the financial issues affecting you and how we might help you resolve them. You can contact us on any of the following numbers or by enquiries@fiduciarywealth.eu London Gibraltar Spain Portugal Regulated by the Gibraltar Financial Services Commission - Licence No. FSC00962b. This guide is provided for general information only and the information contained herein should not be acted upon without professional independent advice. Fiduciary Wealth accept no responsibility for any loss occasioned to any person as a result of or in consequence of action taken or refrained from in reliance of the contents herein. Not all of the services referred to in this document are regulated. 7