Investing using Wrappers & debunking a few myths

Everybody that invests into anything has an appetite for risk, often people invest without understanding what their risk tolerance is & what is their capacity for potential loss.

Both of these need to be assessed using a proven robust repeatable system, and it needs to be re evaluated at least annually.

You may have heard the terms Wraps & Wrappers, well they are two different things; a simple explanation is that a Wrap (also known as a Platform) is an administration tool allowing clients to hold a varying range of investments with one service provider for which a fee will be charged.

Try thinking of a Wrapper as a shell into which you can place various assets, there are many types of Wrapper such as Enterprise Investment Schemes (EIS), Venture Capital Trusts (VCT’s), Life Assurance Bonds (Onshore & Offshore), Pensions, Open Ended Investment Companies (OEICS), Collectives & Stocks & Shares ISA’s.

Yes an ISA is a Wrapper & not a product, another myth to debunk here is that contrary to popular belief a Stocks & Shares ISA is not tax free, it is tax efficient, it is not subject to Capital Gains Tax or income tax however there is a 10% tax credit on Dividend distributions which cannot be reclaimed by anyone, and upon death the holdings are added back into the holders estate for Inheritance Tax (IHT) assessment.

Wrappers all have different features, benefits & tax treatment & must be advised specifically to suit a clients particular circumstances, for example a Collective is excellent to utilise your Annual CGT allowance, currently £10600 per annum.

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Please note when reading any information on this website: past performance is no guide to future performance. The value of an investment may go down as well as up and an investor may not get back the full amount invested. Before investing, please ensure that you have read the information set out in the simplified prospectus, which includes full details of the charges. Any material available is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. Opinions expressed on this website represent the views of Stephen Baker Financial Consultants Ltd at the time of publication, are subject to change, and should not be interpreted as investment advice.

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