High Net Worth Briefcase

• To maximise investment potential and choice
• To minimise any tax liability
• To ensure flexible access

• Client has £1,000,000 in a cash deposit account, earning 4% a year interest
• The tax payable on this is £20,000 a year (50% on £40,000 interest) – 20% at source and 30% through his tax return
• Client transfers the money into a deposit account within Portfolio Account; no tax on an ongoing basis, so £40,000 a year rolls up instead of £20,000
• Client keeps the bond for 15 years, at which point it is worth just over £1.8 million
• If cashed in, the tax bill would be over £400,000 (at 50%), but the net value would still show a gain of nearly £55,000 over the deposit account
• If client decides to retire abroad and establishes non-UK residency, he could cash in the bond without any liability to UK income tax (depending on where he is resident he may have to pay local tax)

Please note: All figures are gross of product charges

• Open architecture - huge fund choice as well as cash deposits
• Can switch at any time, with the benefit of 10 free deals a year and preferential fund terms
• Tax would be deducted at source on the underlying funds of an onshore bond - see the difference
• Income generated within a UK collective would be taxed on an ongoing basis - see the difference
• No capital gains tax on switches
• With a collective, would have to stay out of the country for five tax years to avoid UK tax on the investment gain