Investment after filling an ISA and high earners

Agrav

Good afternoon,

I'm in a fortunate position this year where I've been able to fill my ISA allowance already and was wondering what other tax efficient investment options are out there, if any?

Further to this, I was wondering what the options are to high earners that might be able to invest between £30 - £50K per year? They'll fill their ISA for sure, perhaps put student buy-to-lets inside a PSC Ltd but what other options would they consider? Buying a small business? International property? What do high earner actually do with the money they invest?

Thanks,
Lee

ColdIron

Have you made full use of your pension allowance? They are usually top of the list for higher rate tax payers due to the tax rebate

masonic

Agree with ColdIron on pension contributions up to the limit for tax relief. If there is anything left over or you are looking to access before age 55-60, then Venture Capital Trusts might be worth a look but tend to be fairly high risk.

steampowered

I put my excess funds - after pension contributions and filling up the ISA - into bog standard stocks and shares.

The other tax efficient options come with a very high degree of risk. You might as well just pay the tax in my view. CGT is very low in the UK and comes with a very generous annual allowance.

You could look at making EIS investments and VCTs. Though those involve investing in high risk companies.

There are other 'tax efficient' schemes out there, but many of them are very dodgy. Just look at all the schemes set up to take advantage of film tax credits, most of which collapsed with total loss of capital after HMRC challenged the schemes.

Buying student lets through a company sounds very tax inefficient to me. You'll be paying the higher rate of stamp duty, income tax on the rent and CGT on capital gains.

Agrav

Thanks for the input!

@steampowered - yes, I am interested in exploring student BTL's via a Limited Company but I am unsure whether buying property (no matter the vehicle) would be advisable at the moment.

Any thoughts on buying gold at the moment? I am speculating a property market crash in 2020/2021 and historically, gold performs strongly during crisis'.

Lee

Primrose

You could always top up your Premium bond holding to the maximum £50k allowance. Not a high earner unless you're lucky with prizes but income is tax free and you have full govt protection if the stock market takes a sudden unfortunate dive.

ianthy

If you have a partner/family could consider topping up all of the tax free savings on their behalf.

I have done the same for my husband, SIPP and ISA's.

Drp8713

Agrav wrote: »

Thanks for the input!

@steampowered - yes, I am interested in exploring student BTL's via a Limited Company but I am unsure whether buying property (no matter the vehicle) would be advisable at the moment.

Any thoughts on buying gold at the moment? I am speculating a property market crash in 2020/2021 and historically, gold performs strongly during crisis'.

Lee

I think once I fill my £40k pension allowance and £20k S&S ISA allowance, CGT free Gold Brittanias would be my next step.

AnotherJoe

Agrav wrote: »

Thanks for the input!

@steampowered - yes, I am interested in exploring student BTL's via a Limited Company but I am unsure whether buying property (no matter the vehicle) would be advisable at the moment.

Any thoughts on buying gold at the moment? I am speculating a property market crash in 2020/2021 and historically, gold performs strongly during crisis'.

Lee

Terry_Towelling

Don't rule out the option to overpay your mortgage (if you have one). Whilst there may be other ways of creating more wealth, many of them are speculative and risky and their success (or failure) cannot be measured in advance. Mortgage overpayments are guaranteed to have a fully-measurable impact. Each overpayment has a cumulative effect for every year that remains on the mortgage and if interest rates rise that effect gets bigger.

And it might just be the Mr Cynical-Picky that I am but it grates when I hear work income referred to as 'earnings'. Being paid for doing a job and actually earning the money are not the same. Some people 'earn' every penny they get paid but some people get paid far more than they 'earn' - I know because once I was one of the latter (briefly). Karma soon finds ways to redress the balance though - as I'm finding out.

bostonerimus

Agrav wrote: »

Thanks for the input!

@steampowered - yes, I am interested in exploring student BTL's via a Limited Company but I am unsure whether buying property (no matter the vehicle) would be advisable at the moment.

Any thoughts on buying gold at the moment? I am speculating a property market crash in 2020/2021 and historically, gold performs strongly during crisis'.

Lee

If the ISA is full then make sure you are also using all of your pension allowance. After that look a equity funds that don't pay large dividends. Keep it simple.....as far as gold goes even the real stuff is often "fool's gold".....avoid volatile commodities.