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How
to shelter your hard-earned cash from the Taxman
Cautious
or a Gambler? These products could make money for you
 LOW
RISK:
- National
Savings 17th Issue index-linked certificates provide five-year
returns linked to inflation, plus 2% extra interest compound.
Maximum investment £10,000.
- National
Savings 55th Issue Certificates pay 5.25% per annum over
five years. Maximum investment £10,000.
- National
Savings Children's Bonds are an ideal gist for children
or grandchildren. The current issue is paying 5.25% per
annum for five years. Maximum investment £1,000.
- Cash
ISA's - Mini/Maxi £3,000.
MEDIUM
RISK:
- Ten-year
friendly society savings plans provide tax-free returns
from equity and bond-based investments. Maximum contributions
are £25 monthly, £270 annually.
- Pensions
provide upfront tax relief at all rates with maximum contributions
based on a percentage of net relevant earnings. On retirement,
up to 25% of pension fund can be taken as a tax-free lump
sum. The balance, paid as a regular pension, is taxable.
- ISA's
- Maximum investment for the 2000/2001 tax year is £7000,
reducing to £5,000 thereafter. These offer exposure to equities,
unit trusts, investment trusts and corporate bonds. All
gains are tax-free.
- Qualifying
life policies - those where premiums are usually payable
for 10 years or more - provide tax-free returns although
capital gains tax will already have been deducted.
HIGH
RISK:
- Direct
equity investment - stocks, shares, futures and commodities.
Large gains subject to Capital Gains Tax on disposal. Tax
planning essential to minimise potential liability.
- Venture
Capital Trusts offer investors exposure to small or medium-size
enterprises. Income tax relief of 20% on subscriptions of
up to £100,000 per tax year provided the investment is held
for five years. Both income and capital gains are tax-free
after five years.
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