Winter 2019

Gifts that keep on giving

Christmas is around the corner and adverts for toys and gadgets are everywhere. But have you thought of making a gift of an investment to your children or grandchildren that has longer-term value?

Instead of something they soon outgrow or forget, you could choose:

■ Junior ISAs (JISAs), which have a maximum overall investment of £4,368 in 2019/20 for each child. JISAs make great gifts because they escape tax on investment income and capital gains, as well as the anti-avoidance rules on parental gifts to minor children.

■ A personal pension grows free of capital gains tax and there’s no income tax until benefits are drawn. The maximum net investment/gift in a tax year is £2,880, which tax relief boosts by 20% to £3,600.

■ Investment funds can be gifted to children, typically by creating a bare trust, although other routes are possible. There are no limits on the amount you can gift, but there are potential income tax and inheritance tax consequences that need to be kept under review, particularly for larger investments.

Deciding which investment(s) are most appropriate, and how to structure them, depends on a range of factors. Tax is the obvious one, but so too is the amount of control you want to exercise. For a discussion of your options for making gifts, talk to us soon – it’s that time of year.

✢ The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax or trust advice.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

In this issue:

» Caught up in pension allowance tax traps?

» Investing on principle

» Reversals of fortune – the value and income challenge

» All change on company car tax

» Five ways to develop better spending habits

» It won’t happen to me… protecting your income

» Still holding a cash ISA?

» 31 January tax reminder