The Government wants you to save and invest for your future, and so has allowed tax wrappers to help. A tax wrapper is a financial product, such as a pension, Individual Savings Accaunt (ISA) or bond, within which your investments can be held, and which usually has certain tax benefits.
- Some give you back tax that you have already paid on money when you invest (e.g. pensions)
- Some allow you to not pay tax on the money you make (e.g. ISAS)
- Others allow you to delay paying tax till a later date, when it may be more beneficial for you (e.g. on and offshore bonds)
- It can also be in your best interests to invest directly into a fund.
The government tends to review these schemes every year, which means it is impossible to say one is better than another without individual advice.
We will recommend the most effective way to hold your investments, whether held in single or joint names, and often with a combination of available schemes. Sometimes we simply recommend you move money from one to another to take the maximum advantage of the current incentives and allowances
The choice of tax wrapper affects what tax you pay on the investment funds inside, and should not affect how well the actual investment does.
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