Investing in young businesses is risky, but tax-efficient enterprise investment schemes can cut the risk.
The increase in capital gains tax in the Budget has made many investors look at ways to save tax. Who should consider enterprise investment schemes?
There’s a saying in the finance world that ‘you shouldn’t let the tax tail wag the investment dog’, in other words, you shouldn’t make investment decisions on the basis of saving tax. It’s a useful phrase because there’s little to be gained in saving tax if the underlying investment doesn’t tie in with your own attitude to risk or long-term aims. Having said that, there’s no point paying more tax than you need to, and many investors – even those who are comfortable with the idea of high-risk investments – aren’t aware of the tax-saving potential of enterprise investment schemes.
Getting started in shares, understanding the jargon.
Do you know what cyclical stocks are or what market capitalisation means? No? You’re not alone! But share jargon doesn’t have to be scary.
If you’ve ever thought about the idea of investing in shares, you may have been put off by all the jargon that seems to go with it. I can’t think of many people who like jargon, and financial terminology often seems particularly impenetrable. You don’t have to sound like a stockbroker to successfully buy or sell shares but it's useful to know what some of the terms means. And, rather like learning a foreign language, it’s not so difficult once you’ve mastered a few words.
A beginner’s guide to investment trusts; how they work.
Do you know your unit trust from your investment trust? Investment products that may appear similar can be very different under the surface.
You may never have heard of investment trusts, but there are over 400 different ones with around £85 billion invested. Most stocks and shares ISAs invest in pooled funds, rather than in shares of individual companies. But there’s a way you can combine the two by putting money into an investment trust. Shares in investment trusts are traded on the stock market just like any other share. The big difference is that investment companies buy lots of different shares (or other assets, such as bonds) which spreads your money around. So how do investment trusts work?
