Tax Tip #13 INVEST FOR GROWTH
Investing in non-income producing assets can be a good way to minimise your income tax liability. Two options to consider include:
Growth Funds – Investing in a growth fund that does not pay an income, allows you to potentially utilise your annual CGT allowance rather than paying income tax. With some planning, they can even be used to effectively provide some “income” through regular withdrawals of capital
Single Premium Investment Bonds – These can allow you to benefit from valuable tax deferment if you are a higher/ additional rate taxpayer, especially when the underlying investments in the Bond are income-producing. This is because no taxable income arises during the “accumulation period”. It is possible to draw 5% of the amount invested for 20 years without paying tax at the time of the withdrawals.