Savings and Investments
National Savings Products
National Savings and Investments offer financial services products, which are guaranteed by the UK Government. The range of products is accessible directly from National Savings and Investments, from Post Offices or through Financial Advisers.
Risk Warning
National savings and Investments are backed by HM Treasury, however we recommend that you seek professional advice before deciding which product is suitable for you.
Onshore Investment Bonds
Onshore Investment Bonds are single premium investments. These plans do not have a maturity date but should be considered for terms of 5 years or more.
These investments have minimal life cover, usually 101% of the bid value of the plan at date of death and can be set up on a single, joint or multi-lives assured basis. Investment Bonds can be taken out by Trustees for the Trust Beneficiaries.
Offshore Investment Bonds
Offshore Bonds are usually offered by the Subsidiaries of UK Life Companies and are typically run from Isle of Man, Dublin and the Channel Islands. The advantages of Offshore Bonds are that they grow free of UK Tax, which is known Gross Roll Up. There may be a small Withholding Tax charged, nevertheless the Gross Roll Up can potentially offer a significant increase in performance. Individuals can also choose to appoint a specialist investment manager to manage the portfolio of investment held within the bond.
Brewin Dolphin Ltd is regulated in Jersey by the Jersey Financial Services Commission and Is licensed in Guernsey by the Guernsey Financial Services Commission to conduct investment business.
Investment Bonds is an area that requires specialist advice, please contact us for further information.
School Fees Planning
Parents who wish to send their children to private schools have to pay substantial costs, usually for long periods of time. School Fees are steadily rising, normally above inflation.
For parents who are considering funding for private education, they will need to consider a number of factors, to ensure that they can afford to put their children through this system. For example:
- Current School Fee costs and expected increases (usually above inflation)
- How long before school fees need to be paid and for how long
- How many children require private schooling
- How much money they can afford to invest and how often
- Level of risk you are willing to accept
- Expected income growth
- Tax position
Investments
School Fees can be funded in advance by using investments. The suitability of investments used will depend on attitude to risk, the investment term and the taxation situation. Investments that are typically used are:
- Individual Savings Accounts
- Fixed Term Annuities
- Unit Trust/OEICS
- Investment Bonds
Protection
Consideration should also be given to protecting the ability to fund or pay for private education in the event of death, critical illness or being unable to work through accident or illness.
Policies that should be considered include:
- Family Income Benefit which aims to replace an income on death for a set term.
- Critical Illness Assurance that pays out a lump sum on diagnoses of a recognised condition
- Income protection to replace an income in the event of being unable to work through accident or illness
Venture Capital Trusts
The Venture Capital Trust scheme started on 6 April 1995.
VCTs are companies listed on the London Stock Exchange, and are similar to investment trusts. They are run by fund managers. Investors can subscribe for, or buy, shares in a VCT, which invests in trading companies, providing them with funds to help them develop and grow the business.
The scheme encourages individuals to invest indirectly in a range of small higher-risk trading companies whose shares and securities are not listed on a recognised stock exchange. So, if you invest in a VCT, you spread the investment risk over a number of companies.
VCTs must be approved by HMRC for the purpose of the scheme. Her Majesty’s Revenue and Customs, (HMRC) provide approval if the scheme meets certain conditions. Investments in VCTs may be entitle you to various income tax and capital gains tax reliefs, and VCTs themselves are exempt from corporation tax on any gains arising on the disposal of their investments.
Risk Warning
A VCT is generally considered to be a higher risk investment. The value of your investment can fall and you may get back less than you invested.
We strongly recommend you seek professional advice before entering into any of the contracts mentioned above.
The tax treatment and tax benefits of the products outlined above are based on current legislation and are subject to change.