Tax Efficiency

Question 1

Additional information to improve tax efficiency

Answer 1

Facts
B
-Capacity for loss
-Tax allowances and wrappers used
A
-Breakdown of asset allocation
-Level of diversification and geographical split
-Fund choice
N
-Objective
-Income
-Growth
T
-Timescale
T
E
-Charges
R
-Liquidity
-Performance
-Held on platform/directly
R

Willingness
B
-Willingness to use tax allowances and wrappers
A
-Willingness to make changes
T
T
E
-Willingness to use investments to create income
R
-Willingness to hold on platform
-Willingness to use discretionary fund manager
R

Opinions
B
A
T
T
E
R
-Do investments match ATR
R

Question 2

Advantages of drip feeding cash into a S&S ISA

Answer 2

Uses ISA allowance, so it is not wasted
Potential for tax-free growth
Potential hedge-against inflation
Can provide income, which will be tax-free
Adds diversification- asset, geographical, funds, and stocks
Benefit from fund manager expertise
Cash often loses value
Benefit from pound cost average
Match ATR and capacity for loss