Make collective investments less taxing

With the recent Pre-Budget Report shifting the spotlight onto the use of appropriate tax wrappers and collectives, Fidelity FundsNetwork is highlighting a package of developments it has put together to assist advisers and their clients when making collective investments.

Paul Kennedy, Business Development Director, for Trusts & Tax Planning Solutions at Fidelity FundsNetwork said: “Whilst the industry still awaits certainty of the final CGT legislation, there can be little doubt that many advisers will look to use collectives (OEICs and Unit Trusts) as opposed to insurance bonds in circumstances where this is advantageous to their clients, particularly higher rate taxpayers. There is already a spotlight on the pros and cons of collectives versus insurance bonds and our developments dismiss some of the myths being circulated about collective investments.”

The FundsNetwork range of services to help tax planning with collective investments includes: an annual consolidated tax statement; a withdrawal plan for collective investments; investment valuations and planning tools which look through the tax wrapper and a range of guides on the use of collectives for IHT trust planning.

Kennedy added: “There is a lot of talk about the various ‘features’ of insurance bonds versus collectives, some spurious, some valid. I urge advisers not to be hoodwinked into thinking collectives are an administrative or tax nightmare…they needn’t be. A consolidated income tax statement brings together all the information needed from each tax voucher. Also, don’t be lead to believe that certain features familiar to bonds - such as regular withdrawals and IHT trust planning - can’t be found with collectives…they can. For example our own range of Trusts is designed to work with our array of collectives as well as the FundsNetwork life wrappers.”

Tax Planning Help at FundsNetwork

Annual Consolidated Distribution Summary: One document that provides the three simple figures that need to go on the tax return. The document breaks down into dividend distributions and interest distributions and full details of all the individual distributions are included as well.

Withdrawal Plan for Collectives: The client can select a fixed regular withdrawal on a monthly, quarterly, six-monthly or annual basis. Withdrawals may be taken from one specific fund or a number of funds.

Investment Valuations and Planning Tools: With the client’s investment assets all in one place, the FundsNetwork platform also offers the adviser the ability to review the client’s overall investment portfolio in one go, irrespective of whether it is split between various different tax-wrappers.

Guides to IHT trust planning with collectives - supporting the FundsNetwork range of multi-asset trusts and providing a detailed guide to the taxation of collectives v. bonds under trust.
Fidelity International Limited (“FIL”) and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. The FIL Organisation manages a total of £148 billion of assets.