Best holdings in a GIA - tax purposes

Adyinvestment

UK higher rate tax payer

What are the best holdings to have in a General Investment Account for UK tax purposes?

Individual stocks seem to be the most attractive so as to only use the capital gains allowance as the lowest tax with being able to time sells.

I would prefer to have some form of multi asset fund rather than individual shares as my share picks so far are proving to be very volatile! (which I am fine with from a long term view)

I have some cash in a Vanguard Invester GIA but I can not find a fund/ETF that would suit.

I also have another GIA (which has my stocks) with IG Trading which seems to have an overwhelming choice - these stocks I am holding should cover the £2000 yearly dividend allowance.

It seems silly to risk my cash if I am going to be giving HMRC 45% of any gains

eskbanker

Adyinvestment said:

What are the best holdings to have in a General Investment Account for UK tax purposes?

Ones that aren't going to make any gains?

Not sure I fully understand your question, in terms of exactly which options you're weighing up, but a familiar adage on here is 'don't let the tax tail wag the investment dog', i.e. buy what will suit your investment objectives, minimising net cost as a secondary aim....

Adyinvestment

I have gone around in circles a bit   

I think what I am looking for are ETF's (where you pay CGT when you sell) that have little to no income to be reported - I just don't have the knowhow to find out the percentage of income that is expected in each ETF?

Alexland

If you just want capital gains then the assets in iShares Physical Gold SGLN are unlikely to generate any dividends or pay interest coupons anytime soon. Or if you want equities maybe a growth trust such as SMT which has a low dividend yield. How would these fit in with your other investments? Is there a danger the tax tail might wag the investment dog? Will there still be such a generous capital gains arrangement when you get to selling?

Adyinvestment

Those both look interesting, thanks.

For my reference how do you know what trusts/etc are mostly growth or income, is it experience or do you check all the individual holdings?

My aim is to "hopefully" grow funds kept outside of my tax free wrappers until they can be put into the wrappers. I see keeping it as cash as a loss (I accept the risk)

Dazed_and_C0nfused

these stocks I am holding should cover the £2000 yearly dividend allowance

It isn't an allowance it is a 0% rate band and although it makes no difference to most people looking at your previous threads it may well be different for you.

The £2,000 dividends which are taxed at 0% form part of your adjusted net income so if they fall in the £100-£125k income band they will reduce your Personal Allowance meaning they are effectively taxed at 20%.

For example £2000 of dividends could reduce your Personal Allowance by £1000 meaning an additional £1000 of income is taxed at 40%.

dunstonh

What are the best holdings to have in a General Investment Account for UK tax purposes?

That criteria gives nothing to filter down the 30,000 odd options that exist out there (and near-infinite combinations).

Individual stocks seem to be the most attractive so as to only use the capital gains allowance as the lowest tax with being able to time sells.

Most people in the UK do not have the skill to effectively run a portfolio of stocks.  And there is nothing about shares that makes them stand out in tax efficiency compared to alternatives.

I have some cash in a Vanguard Invester GIA but I can not find a fund/ETF that would suit.

Vanguard have a small range of multi-asset funds available.  Should be easy enough to find.

It seems silly to risk my cash if I am going to be giving HMRC 45% of any gains

Where do you get 45% from?

Adyinvestment

Dazed_and_C0nfused said:

these stocks I am holding should cover the £2000 yearly dividend allowance

It isn't an allowance it is a 0% rate band and although it makes no difference to most people looking at your previous threads it may well be different for you.

The £2,000 dividends which are taxed at 0% form part of your adjusted net income so if they fall in the £100-£125k income band they will reduce your Personal Allowance meaning they are effectively taxed at 20%.

For example £2000 of dividends could reduce your Personal Allowance by £1000 meaning an additional £1000 of income is taxed at 40%.

Thank you - it is true I need to up my knowledge on this, although this year I don't believe it will affect me as I am now sure my adjusted income will be in the additional rate.

Adyinvestment

dunstonh said:

What are the best holdings to have in a General Investment Account for UK tax purposes?

That criteria gives nothing to filter down the 30,000 odd options that exist out there (and near-infinite combinations).

Individual stocks seem to be the most attractive so as to only use the capital gains allowance as the lowest tax with being able to time sells.

Most people in the UK do not have the skill to effectively run a portfolio of stocks.  And there is nothing about shares that makes them stand out in tax efficiency compared to alternatives.

I have some cash in a Vanguard Invester GIA but I can not find a fund/ETF that would suit.

Vanguard have a small range of multi-asset funds available.  Should be easy enough to find.

It seems silly to risk my cash if I am going to be giving HMRC 45% of any gains

Where do you get 45% from?

I am kind of bumbling along as I go      I have always been very hands on and this is kind of the way I do things until I understand them inside out

regarding the 45% - as an additional rate taxpayer this year that is what I will have to pay on any income generated from ETF's?
I would prefer to pay only tax as Capital Gains in another tax year 

Alexland

Adyinvestment said:

For my reference how do you know what trusts/etc are mostly growth or income, is it experience or do you check all the individual holdings?

I don't know of a single source to sort on low income investments but most of the data is available on the Internet if you are willing to dig through it. Before investing in anything it is always worth taking the time to understand the strategy and check the underlying holdings. You can never learn enough when large sums of money are at risk.

thegentleway

Morningstar has an style box which ranks equities in value, blend, or growth categories