Where to put legacy outside of tax free wrappers?

zagubov

There are additional Tax-exempt savings plans you and any family members can take out, but they're for small amounts and you need to pay in for 10 years.
They charge fees and may have age limits, but if you're determined to gain the maximum tax-free earnings they might be worth a look.
You could search online for TESPs or for Friendly Societies which are the kind of organisations that offer them.

Doctor_Who

handful said:

Doctor_Who said:

squirrelpie said:

handful said:

Presumably I can put money into my II SIPP account and they will keep it separate from my "tax free pension wrapper" ?

No, SIPP accounts are tax free pension wrappers. You may be able to open another account with II that is not a SIPP account but is a general account instead. I don't know the particular detail of II accounts.

I have SIPP, S&SISA and GIA accounts with II, everything is kept separate. You can do internal transfers of cash between accounts upto certain limits (e.g. £20K ISA allowance).

That's what I was thinking but worded badly! How does the tax on investments work if you exceed the £500/£1000 threshold? Presumably I would have to declare it as II wouldn't know what other interest I might be earning elsewhere?

Outside of a tax wrapper (SIPP/ISA) then income is taxable. It would depend on what you invested in as to whether it contributed to your total interest for the personal savings allowance. Some investments will pay interest (mainly those invested significantly in bonds) and other will pay dividends, which may be covered by the dividend allowance (£1000 this tax year, £500 next). II will send you a consolidated tax certificate around May/June each year telling you the dividends and interest you have earned in the GIA. Note that you need to keep records for CGT purposes as making a capital gain in the GIA is taxable if above the CGT allowance (£6000 this tax year and £3000 next year).

dunstonh

zagubov said:

There are additional Tax-exempt savings plans you and any family members can take out, but they're for small amounts and you need to pay in for 10 years.
They charge fees and may have age limits, but if you're determined to gain the maximum tax-free earnings they might be worth a look.
You could search online for TESPs or for Friendly Societies which are the kind of organisations that offer them.

Whilst your answer is correct, it is worth noting that TESPs are typically obsolete nowadays due to the extremely high charges these have.  They are on par with endowment policies of the 80s and 90s.  Mainly because the premium level is so low and take up low.  They lack the cross subsidy that modern investment platforms give.  i.e. a platform will have people that are unprofitable and those with larger amounts that are profitable who cross subise those with smaller amounts.    A TESP only has those with smaller amounts.

The high charges will more than wipe out any theoretical tax advantage.

Albermarle

handful said:

Doctor_Who said:

squirrelpie said:

handful said:

Presumably I can put money into my II SIPP account and they will keep it separate from my "tax free pension wrapper" ?

No, SIPP accounts are tax free pension wrappers. You may be able to open another account with II that is not a SIPP account but is a general account instead. I don't know the particular detail of II accounts.

I have SIPP, S&SISA and GIA accounts with II, everything is kept separate. You can do internal transfers of cash between accounts upto certain limits (e.g. £20K ISA allowance).

That's what I was thinking but worded badly! How does the tax on investments work if you exceed the £500/£1000 threshold? Presumably I would have to declare it as II wouldn't know what other interest I might be earning elsewhere?

The £500/£1000 thresholds are for savings interest. Tax on unwrapped investments is a different issue altogether,