Unit Trusts

Unit Trusts provide a means of investing in a portfolio of stocks, managed by professional investment managers. By investing in a range of equities, corporate bonds, gilts or cash, the fund manager has discretion to move money from one asset class to another in the light of prevailing market conditions within the terms of the Trust Deed.

Unit Trusts generally have two prices - a bid price at which you sell and an offer price at which you buy.

Dividends paid from a Unit Trust are subject to income tax. Dividend distributions on equity funds carry a tax credit.  If you are a basic rate or non taxpayer there is no further income tax liability.  Higher rate taxpayers have a total liability of 32.5% on dividend income and the tax credit reduces this to 22.5%, whilst additional rate taxpayers have a total liability of 42.5% reduced to 32.5% after the tax credit is applied.

Any interest from fixed interest funds, (corporate bonds, gilts and cash) is paid net of 20% tax.  Non taxpayers may reclaim this tax, but basic rate taxpayers cannot.  There is a further liability of 20% for higher rate taxpayers and 30% for additional rate taxpayers.

All funds are exempt from tax on capital gains realised within the fund.  Personal capital gains are subject to capital gains tax at 18% or 28% depending on your taxable income.  However, you have an annual capital gains tax allowance, currently £10,600, before there is any tax liability.

Unit Trusts are overseen by an independent trustee. 

THE SMALL PRINT

Past performance is no guide to future performance. Please remember that the value of an investment may fall as well as rise and an investor may not get back the full amount invested. Tax rules and regulations are subject to change.

To find out which Unit Trust is suitable please contact us.