Types of investment

Several types of investment are described below.

Investments that may be attractive to non-taxpayers

Some taxpayers do not have sufficient income to fully utilise their personal allowances. They may therefore be able to receive interest gross (i.e. without the deduction of tax at source).

Any income from the following accounts is taxable and will need to be shown on the tax return, if applicable:

• National Savings Bank (NSB) accounts (the first £70 of interest credited to the NSB Ordinary account is exempt from income tax)
• Any bank or building society account (a form will need to be completed in order for the interest to be paid gross by the bank or building society).

Investments that may be attractive to higher rate taxpayers

The following investments may be attractive to higher rate taxpayers. There are restrictions that apply to the following that should be read before the investment is made:

Enterprise Investment Scheme

• Minimum investment £500, maximum £150,000 - per year.
• Income tax relief is 20% of the original investment.
• On disposal of the shares, any gain may be free from capital gains tax.

Venture Capital Trusts

• Investment up to a maximum of £100,000 per year.
• Income tax relief is 20% of the initial investment.
• Dividend income is tax free.
• On disposal of the shares, any gain may be free from capital gains tax.

Enterprise Zones

• Income tax relief is up to 40% on most of initial investment

Investments that may be attractive to any taxpayer

• Any bank or building society account
• National Savings accounts
• Pension scheme
• Stocks & shares
• Premium Bonds
• ISAs (Individual Savings Accounts).

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2. Articles
3. Investment types
4. Tax free schemes
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