Minimise tax liability
The first port of call for any investor should be to put his investments in a stocks and shares Isa. The last thing he would want to do when he has spent time building an investment portfolio is to give a chunk of it to the taxman. Taxes are just another cost to the portfolio taken out of any profit. And there are ways to legally avoid taxes. Investments held in an Isa will not incur any capital gains tax on capital growth, nor is there further tax to pay on income generated by share investments.
Your client can put a wide variety of asset classes into the Isa, including individual shares, funds and gilts (government bonds) and corporate bonds. Savers get a new Isa allowance each tax year – in the current tax year (2014/2015) they can invest up to £15,000 in an Isa.
Adrian Lowcock is head of investing of Axa Wealth
Before starting out investing in an Isa, the client needs to set a clear goal of what he wants to achieve.
Before he starts piling money into various funds or individual shares, it is important that your client does his homework.
There are thousands of funds out there for investors – far too many to make a comprehensive choice.
