Investments and tax

slopemaster

Someone asked in an old post about getting income effectively tax free (using CGT)
"I have always wondered whether there is a product out there which will pay a guaranteed rate of return like the bank would but structure it so it us paid as growth instead of income.
This would a top seller IMHO.
Any one know of one?"

Unfortunately there was no reply - any one know of anything like this?

amistupid

Yes. It's called the goose that lays the golden eggs.

slopemaster

Don't see why not tho' - surely easy enough to come up with something that would make use of CGT allowances by saying 'if such an index does x you get a and if it does y you get b' but with little difference between the two (eg a range between 5% and 7%)....?
Or is it to do with what the underlying investments are in? Why can't they just be in something ubert-safe? Am I missing something?

cheerfulcat

slopemaster wrote: »

Don't see why not tho' - surely easy enough to come up with something that would make use of CGT allowances by saying 'if such an index does x you get a and if it does y you get b' but with little difference between the two (eg a range between 5% and 7%)....?

There certainly used to be a few GEBs structured in this way ( that is, returns treated as capital gain rather than interest ) but there is no guarantee of any return on top of the original capital with GEBs.

Aegis

The whole point of interest is that it's paid on a guaranteed capital sum, whether real in the case of savings or par in the case of gilts and bonds. Capital growth is obtained through capital risk, so I really don't understand how you could easily come up with a guaranteed interest product that managed to get itself treated as capital growth. I suspect that it would be reclassified as interest if the capital wasn't at stake.