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Tax planning can be a complex task, but careful tax planning can save you 000’s and often investors start thinking about these things too late down the line so we wanted to shine a light on some of the tax benefits of our products to help you build a tax efficient portfolio.
Please note that we are not tax advisors and we recommend all customers speak to a tax adviser as benefits will be subject to your individual tax jurisdiction and circumstances. The below information is based on UK tax residents.
There are 3 key tax areas that customers tend take a hit on when investing. The rates of tax change each year but here is a summary of current rates in the UK.
1. Income tax
|Band||Taxable income||Tax rate|
|Personal Allowance||Up to £12,570||0%|
|Basic rate||£12,571 to £50,270||20%|
|Higher rate||£50,271 to £125,140||40%|
|Additional rate||over £125,140||45%|
2. Inheritance tax – 40%
3. Capital Gains tax – 20% if you are in the higher rate or additional rate band.
The table below summarises which areas of tax our products can offer relief
|Inheritance Tax||Capital Gains Tax||Income tax|
|Cur8 EIS fund||Yes||Yes||Yes|
|Startup deals (EIS/ SEIS)||Yes||Yes||Yes|
|Fixed Income fund||No||No||No|
The below tax benefits apply to any of our EIS/ SEIS labelled startup deals/ funds
Some of the restrictions
As with any investment there are a number of restrictions that you should be aware of as they will prevent you from claiming the tax benefits;
no tax paid on dividend if you invest via a LTD company
You can find out more information on these products and invest via the live deals page
All of our opportunities allow you to invest via an entity. This means you will only be subject to Corporation Tax (currently 19% if profits are below £50k and 26% if profits are over £250k) instead of Income Tax on profits. In order to do this you can just click invest now on any deal/ fund and will have the option to add your entity details. Note – this feature is not available yet in the mobile app.
If you are looking to reduce the inheritance tax for your predecessors and you have over £325k in assets you should look at getting a trust based will
Some of these benefits may also apply to you, but we recommend speaking to a tax advisor to understand how they impact your tax jurisdiction
We hope that the above information has helped you to start thinking about how you can get the most out of your portfolio – getting this right can have huge implications on the net amount received from your portfolio after tax. As always if you do have any further questions regarding any of these benefits you can reach out to our team via the contact us page.