When we make an investment, the form we fill in tells the Tax Man* (over there on the right) how we want our investments taxed. Either with Income Tax or Capital Gains Tax; we all have an allowance under both.
When your money is invested in an Income Tax environment it could suffer from tax of at least 20% or possibly even more, however, if we choose to be subject to Capital Gains Tax we dictate when that tax is paid, if it is paid at all.
Why haven’t I heard of it? Because, most investment products are taxed using Income Tax. In fact, less than 98% of us pays Capital Gains Tax.
It all becomes a lot clearer when you understand how Capital Gains Tax is calculated, and this is where Campbell Harrison comes in. We can help you make sure you get to to keep as much of your investment in retirement as you can.
At retirement, most people pass their pension pot to an insurance company, who then pay you an income for life - known as an annuity - however, this isn’t always your best option.
By leaving the fund in place, and taking money out when you need it, it’s not all taxable; unlike the income from an annuity.
If you pay tax on an annuity (like the chap on the left) for every £10,000 income you receive you could pay as much as £4,000 in tax! Sounds horrible doesn’t it! If you’re smart though (like the chap on the right) you might not have to pay much tax on your income at all. You might even get the full £10,000... which would you prefer?
Campbell Harrison can manage your funds in retirement, making sure you always have money from your investments available to you, and, that you get to keep as much of it as you can.
Unsurprisingly, after years of investing, some people find it difficult to get out of that ‘saving for retirement’ mentality, but, you‘ve made it to retirement now... and it’s time to start enjoying the fruits of your labour.
It’s what you’ve been investing and saving for all this time, after all!