List of tax-free savings or investments 18 November 2022 at 8:09AM edited 18 November 2022 at 8:10AM in Savings & investments 11 replies 496 views

hallmark

IMO since the Autumn statement it's more important than ever to exploit savings or investments that are sheltered from tax.  That being the case I thought it might be worth compiling a quick list people might want to look into:

NSANDI savings (for example Premium Bonds)

ISAs (cash or shares or other)

Pensions (DB or DC)

Friendly Societies (is there a less fashionable or less well-known asset class out there?  But they offer tax-exempt products)

Spread Betting (despite the name actually could be classed as an investment platform, or at the very least a trading platform)

VCTs / EISs / SEISs




Any others?

ChilliBob

JISA springs to mind, and I suppose Junior sipp, but that's pretty niche

grahamgoo

For clarity, the only nsandi products that are tax free are Premium Bonds and ISAs

jimjames

hallmark said:

Friendly Societies (is there a less fashionable or less well-known asset class out there?  But they offer tax-exempt products)

It's worth pointing out that chasing something being tax free isn't a great option if the investment in question is very poor with very high charges. Paying tax on a good return might be better overall.

hallmark

grahamgoo said:

For clarity, the only nsandi products that are tax free are Premium Bonds and ISAs

There have been others (for example ISLCs) which are still tax-free for those who hold them.  But yes, currently nothing else open to new investors.  I guess it's possible it could change.

hallmark

jimjames said:

hallmark said:

Friendly Societies (is there a less fashionable or less well-known asset class out there?  But they offer tax-exempt products)

It's worth pointing out that chasing something being tax free isn't a great option if the investment in question is very poor with very high charges. Paying tax on a good return might be better overall.

Totally agree hence the advice these might be worth looking into (as opposed to these are worth investing in).

I've never actually crunched the numbers on Friendly Societies or studied them in much details.  I know they were considered very poor investments but not sure if that's changed.  The mere fact the're unloved and unfashionable makes me curious.

MX5huggy

Gold Sovereigns (and other UK legal tender) are tax free. 

dunstonh

Friendly society plans are tax free and meet your criteria but they typically have reduction in yields of in excess of 2% p.a.   That means any tax advantage is wiped out and more.   

  The mere fact the're unloved and unfashionable makes me curious.

They work very similar to an endowment policy except have no taxation.

hallmark

dunstonh said:

Friendly society plans are tax free and meet your criteria but they typically have reduction in yields of in excess of 2% p.a.   That means any tax advantage is wiped out and more.   

  The mere fact the're unloved and unfashionable makes me curious.

They work very similar to an endowment policy except have no taxation.

Is there any demographic or circumstances when you think they might be a good investment?  Or are they more like just a relic of an age when fees were generally high and product choice was more limited.

Ocelot

dunstonh said:

Friendly society plans are tax free and meet your criteria but they typically have reduction in yields of in excess of 2% p.a.   That means any tax advantage is wiped out and more.   

  The mere fact the're unloved and unfashionable makes me curious.

They work very similar to an endowment policy except have no taxation.

I opened a with-profits bond with Friendly Society Liverpool Victoria in 2001, not sure 've ever paid tax on it. Are they all tax free?

dunstonh

Is there any demographic or circumstances when you think they might be a good investment?

No.  They have been obsolete for over 20 years.   We were issued a compliance warning around that time, saying that advisers could be on the hook for misales if they were to recommend them.

Or are they more like just a relic of an age when fees were generally high and product choice was more limited.

Exactly that.  

I opened a with-profits bond with Friendly Society Liverpool Victoria in 2001, not sure 've ever paid tax on it. Are they all tax free?

No. The Friendly societies also offered regular and single premium endowments.   These were taxed internally.