The complex world of tax on investment
The whole tax system has grown increasingly elaborate, thanks to revenue-raising tweaks such as the taxation of child benefit and multiple reforms of dividend taxation. As more changes are introduced, the complexities increase.
This guide offers a brief outline of how your investments are currently taxed and future changes (or freezes) that have already been announced.
“While there have been several proposals from outside the current government for income tax and NICs to be combined and for the newly merged tax to be applied to all income, reform looks highly unlikely in the near term.”
Investing tax-efficiently – what is included in the guide:
• How your investment income is taxed
Income from investments is generally taxed less than earnings because there is no liability to NICs. We talk you through the process.
• Life assurance-linked investment bonds
The tax treatment of single premium life assurance investment bonds often causes confusion. Our example case study illustrates the process.
• Capital gains implications
In most circumstances, capital gains are currently taxed more lightly than income, particularly if your net realised gains fall within the annual exempt amount. Our example case study highlights the potentiality for capital gains and losses.
• Easing the investment tax burden
There are many ways of reducing the burden of tax on your investments, but you should always take professional advice before acting.
Our guide offers expert insight into the options available for investing tax-efficiently and mitigating your tax burden.
