High Earner Options

aroominyork

wmb194 said:

moneysavergirl2 said:

My husband and I are both, after many years of hard work and graft, higher rate tax payers. My husband is a top rate payer.

We have used all usual tax saving options including maxing pension contributions and ISAs, and Premium bonds. We have a simple lifestyle and his job in particular takes a toll and there is a limited amount of time he will be able to do it.

Are there any other ways we can put our savings to work while minimising tax? We pay such huge amounts of tax already that I hate the thought of using a savings account and paying tax on half of the interest.

I'm aware of VCTs.

Can anyone point me in the direction of anything else, or a group or other ideas please? 

Buy gilts trading below par and hold them to maturity as capital gains are tax free. Last I checked there were still a few trading below par with a c.4% yield to maturity, most of which being a tax free capital gain.

Just to clarify, you would want a gilt that pays low interest. That way you have little interest on which to pay tax and the capital gain is tax free. For example if you wanted a gilt maturing in 3-4 years, Treasury 0.375% 22/10/2026 (T26A) trading at 86.95 would be better than Treasury 4.125% 29/01/2027 (T27A) trading at 98.26. Gilts are, of course, at the other end of the risk spectrum from VCTs.