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Overview

Tax efficient investments provide the investor with relief from one or more taxes for the current tax year, or are exempt from income tax and / or capital gains tax. Some investments have both attributes.

The following tax efficient investments are discussed below:

1. •

   individual savings accounts (ISA), including the lifetime ISA, help to buy ISA and junior ISA

2. •

   child trust funds

3. •

   National Savings products

4. •

   life assurance polices or investment bonds

5. •

   venture capital schemes, including enterprise investment scheme, seed enterprise investment scheme, venture capital trusts and social investment tax relief

6. •

   pension contributions

Each type of investment has its own set of qualifying conditions, which generally includes a cap on the amount that can be invested in a particular period. This may be the tax year, or another period. The client’s holding of tax efficient investments needs to be considered as part of the tax year-end planning exercise, to achieve tax savings for the current year and potentially to manage the taxable income for future periods.