Investment Overview

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Investments and taxation

Equity based investments do not afford the same capital security as a deposit account.

The levels, bases and reliefs from taxation are subject to the individual circumstances of the investor and may be subject to change.

It is important to note that the value of investments and income from them may go down. You may not get back the original amount invested and the levels, basis and reliefs of taxation are subject to change. This is not intended as an exhaustive guide.

a guide to investing

Guide to investing

This at-a-glance guide is designed to give you a quick snapshot of a range of different investment vehicles available.

Deposits may be held in:

  • Commercial banks
  • Building societies
  • ISAs

National Savings and Investments have a number of different instruments*:

  • Premium Bonds
  • Income Bonds
  • Investment account
your options

Asset backed investment options

See what asset based investments are available to you:

Shares
  • Issued by companies to raise money
  • Dividends related to profitability (taxable if exceed Dividend Allowance)
  • Potential Capital Gains Tax on realised gains when shares sold
Gilt-edged Securities
  • Government guaranteed
  • Fixed rate of interest or coupon
  • Interest liable for tax (unless covered by allowances such as
    Personal Savings Allowance)
  • Full nominal value repaid at redemption date
  • Some Gilts index linked
  • No Capital Gains Tax on Gilts
Unit trusts
  • Investors’ money pooled to form large funds
  • Medium to long-term investments in stocks and shares and other asset types
  • Broad spread for greater security
  • Professional fund management
  • Units priced on the basis of the value of the underlying investments
  • Income distributed or re-invested
  • Income liable for tax (unless covered by allowances such as
  • Personal Savings Allowance or Dividend Allowance)
  • Potential for Capital Gains Tax
Cash ISA
The overall limit for investment in ISAs in 2022/2023 is £20,000 and the whole amount can be placed in a Cash ISA if required. It’s possible to transfer Stocks and Shares ISAs into a Cash ISA and vice versa.
Open ended investment companies (OEICs) or unit trusts
  • Pooled investments run by limited companies
  • Medium to long term investments
  • Professionally managed
  • Single pricing based on the net asset value
  • Charges expressed separately
  • The funds are ‘open-ended’
Stocks and Shares ISA
In 2022/2023, you can invest the full £20,000 ISA allowance into a Stocks and Shares ISA if you wish. Investors do not pay any personal tax on income or gains.
Investment trusts
  • Pooled investments run by limited companies
  • Medium to long-term investments
  • Professionally managed
  • Stock market determines the price so shares can trade at a discount or a premium to the underlying asset value
  • The funds are ‘closed-ended’
Investment bonds
  • Single premium (i.e. lump sum investment)
  • Non qualifying life assurance policy
  • Medium to long-term investments
  • With profit or unit-linked
  • Withdrawals possible
  • No personal liability for basic rate Income Tax or Capital Gains Tax (assuming a UK bond)
  • Withdrawals may trigger a liability to higher rates of tax or personal allowance

*These products and services are not regulated by the Financial Conduct Authority (FCA).

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Important information

This article (Investment Overview) is intended to provide a general appreciation of the topic and it is not advice.

For more information please contact Centrad Limited on 01922 745400 or email enquiries@centradltd.com and we will be happy to assist you.

Article expiry: 06 April 2023