We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Most tax-efficient way of investing now ISA filled
Dunney77
Posts: 49 Forumite
I have just started investing and have used up my first S&S ISA allowance for this year (invested in a European fund).
I have £30,000 coming in in the next two weeks and want to put this into the Vanguard Lifestrategy funds.
However, now I will fall under UK tax.
I am from the Channel Islands originally and have a bank account there (just moved to start work in London). Is there a way I can invest through Jersey (which doesn't have a capital gains tax) into vanguard.
Not sure how to invest this £30,000 most efficiently?
I have £30,000 coming in in the next two weeks and want to put this into the Vanguard Lifestrategy funds.
However, now I will fall under UK tax.
I am from the Channel Islands originally and have a bank account there (just moved to start work in London). Is there a way I can invest through Jersey (which doesn't have a capital gains tax) into vanguard.
Not sure how to invest this £30,000 most efficiently?
0
Comments
-
SIPP, VCT, EIS or ISA for other half?0
-
Pinner_Ram wrote: »SIPP, VCT, EIS or ISA for other half?
I am 24 so no other half.
Can you explain those acronyms?0 -
-
Fantastic, thank you.
Was looking at the personal pension...
My aim is to invest in the Vanguard Lifestrategy (80/20) every month following a deposit.
How would people approach this differently?0 -
If you are under UK tax law, then Jersey bank accounts will not help you. I assume you fully understand the risk associated with various 'investments' [as opposed to savings].
By "most efficiently" do you mean tax efficiently? If you invest £30K, you can draw down up to £11,100 of gains tax free.
Better tax breaks would come via investing within a pension, although withdrawing that before age 55 is not possible.0 -
Loughton_Monkey wrote: »If you are under UK tax law, then Jersey bank accounts will not help you. I assume you fully understand the risk associated with various 'investments' [as opposed to savings].
By "most efficiently" do you mean tax efficiently? If you invest £30K, you can draw down up to £11,100 of gains tax free.
Better tax breaks would come via investing within a pension, although withdrawing that before age 55 is not possible.
Yes but with the money I have inherited I believe I am more at risk from inflation long term.
With the personal gains allowance of £11,100 - is that per year or can it accumulate. Say if I invest £30,000 and eventually (due to compounding) it rises to £150,000 over a number of years - if that big sum earns £15,000 one year, will that £3,900 be taxed?
Suppose it comes down to whether I am willing to tie my money down for the next 30 years.0 -
With the personal gains allowance of £11,100 - is that per year or can it accumulate.
It's per year and is whatever the allowance is when you cash in.Say if I invest £30,000 and eventually (due to compounding) it rises to £150,000 over a number of years - if that big sum earns £15,000 one year, will that £3,900 be taxed?
CGT taxes the gain when you cash the investment. So if you invest £30k and then cash in at £150k you have made a gain of £120k, all of which would be taxable apart from whatever the allowance is at the time. So £120k minus £11.1k as it stands would be taxable.0 -
If you were investing in the LS 80/20 and you were showing a good profit in a few years time you could sell some of it to use up that year's CGT allowance and immediately use the funds realised to buy a chunk of a similar (but different) investment such as the L&G Multi Index or Blackrock Consensus.
If you do that each year, swapping between say VLS and Blackrock Consensus each time, then you are realising a 'paper gain' to use up your CGT allowance every year.Old dog but always delighted to learn new tricks!0 -
If you were investing in the LS 80/20 and you were showing a good profit in a few years time you could sell some of it to use up that year's CGT allowance and immediately use the funds realised to buy a chunk of a similar (but different) investment such as the L&G Multi Index or Blackrock Consensus.
If you do that each year, swapping between say VLS and Blackrock Consensus each time, then you are realising a 'paper gain' to use up your CGT allowance every year.
But wouldn't the effects of compounding be limited if money kept being taken out?0 -
Say if I invest £30,000 and eventually (due to compounding) it rises to £150,000 over a number of years - if that big sum earns £15,000 one year, will that £3,900 be taxed?
The £15,000 is not a Capital gain, it's (dividend) income.
Basically - if you buy shares/funds for £X and the price when you sell them at a later day is £Y, then your capital gain (or loss) is (£Y - £X).
Any capital gain in an ISA is not subject to Capital Gains Tax (CTG) although the downside is similarly that any loss made in an ISA cannot be used to offset capital gains made elsewhere. If not in an ISA then you'll pay tax on anything over your annual CTG allowance in the year you sell (assuming you've not made any other capital gains that year).
So if you've not shielded the shares/funds in something like an ISA, and you're not making use of your CTG allowance each year, it's worth considering selling them (known as 'crystallizing' your gain) and buying into some other fund when your capital gain is approaching the CTG allowance figure.
In addition, if your holding is paying out £Z a year in dividends, then this counts as £Z of income, and is potentially liable to income tax if not held in an ISA.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354K Banking & Borrowing
- 254.3K Reduce Debt & Boost Income
- 455.3K Spending & Discounts
- 247K Work, Benefits & Business
- 603.6K Mortgages, Homes & Bills
- 178.3K Life & Family
- 261.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards