What does it mean to choose investment trusts?

Our experienced Independent Financial Advisors at Enable in Bishops Stortford tend to recommend more passive investments. But we also know that Investment trusts are a highly popular and well-established way of investing for wealth management. An investment trust is essentially a public limited company with shares quoted on the stock market. When you invest in an investment trust you as good as become a shareholder in that company, they tend to primarily invest in the shares of other companies but some contain bonds or other financial assets a common one being commercial property.

For some an investment trust is an excellent way of gaining access to the potential rewards that active management of a stock market investment can offer – without needing to constantly monitor and manage your portfolio. These trust pools your money with that of other investors and professional fund managers invest this in a wide range of different companies. So even if you only have a small amount to invest, you can gain exposure – cost-effectively – to a diversified and professionally-run portfolio of shares and your risk is also spread much more than if you were reliant on the success of one or even a handful of companies.

There are also some tax advantages when an investment trust sells shares, it is not taxed on capital gains it has made, unlike direct investment made by private investors. Historically over the longer term investment trusts have delivered but past performance is not a guide to future performance. The value of investments in the stock market can go down as well as up and you may not get back your original investment.  If you are interested in finding out more about investing your savings Enable’s IFA's are here to help.




Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Using Trusts to control your assets

Enable of Bishop’s Stortford’s independent financial advisors can see that with people living longer, and with many more having more complex family structures, as people often divorce, remarry  and sometimes have second families at older and older points in their lives, there is a place for Trusts in wealth management that is not all about tax avoidance.

The ONS figures for England and Wales in 2012 showed the biggest increase in the number of marriages was for men and women aged 65 - 69, rising 25 per cent and 21 per cent, respectively.

Trusts can be a vital tool for modern families, in helping to cope with children from different relationships, step-children and age-gap relationships and for making sure the right people receive money at the right point in their lives.

HMRC's own Research Report 25 says that tax is usually a secondary consideration in using a trust:

"The main motivation for setting up a trust appears to be related to control of assets, rather than tax planning as found in both the in-depth interviews and the survey of trustees.  While tax planning is important for some, it is usually cited second."

But HMRC's proposed extension of the Disclosure of Tax Avoidance Schemes (Dotas) rules could impact mainstream family situations. This new regime requires 'scheme promoters' to notify HMRC of a new scheme, which is then allocated a scheme reference number (SRN) which needs to be declared in their tax return. This information-gathering exercise is intended to be an alert system to HMRC, so any perceived abuse of the tax rules can be reviewed and action taken if required.

The consultation closes on 23 October. It's possible new rules could be in force for April 2015, but the timescale isn't clear yet. The gap between perception and reality can be large when trusts are viewed as a "tax avoidance scheme" lens, rather than as an everyday reality for further advice Enable’s IFA’s in Bishop’s Stortford are here to help.





Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE