Itsallaguess wrote:I'm still working, and so I've found myself to be a bit cash-heavy in recent years, and as a primarily income-oriented investor who prefers to remain ducking underneath the rapidly-lowering dividend-allowance, over time I've landed on the following unsheltered processes that sit quite comfortably with me -
- Vanguard 60/40 LifeStrategy - With a low yield of around 1.7%, very low charges, and a broad investment remit, I've been happy to allocate some capital to this investment for a few years now, with relatively older funds that I've not been able to shelter due to filling ISA allowances already
That's one that I haven't looked at for a few years, but probably should have as an easy way into bonds now that they're a bit more back in favour. Will do some research on them.
Itsallaguess wrote:- Premium Bonds - Strictly-speaking, these funds are one layer of what's hoped to be a post-work safety-strategy, but it's a useful bucket to flow excess funds into in terms of never having to worry about any unsheltered tax implications at all, and with a general return that provides some regular pocket money, it also delivers some pleasurable monthly-draw excitement
I should probably have put some in that direction three or four years ago when bank interest was effectively zero. Might have made something towards combating inflation without worrying about tax.
I've noticed the recent postings and have been wondering about dipping a toe. I know nothing about gilts but really should learn quickly.
Itsallaguess wrote:- JPMorgan Indian Investment Trust (JII) - A concious and longer-term strategic shift, driven by trends in unsheltered dividend-allowances and a problem of 'cash-heaviness' that I thought might be shorter term than is actually playing out, is one where I will if possible actively seek to utilise available CGT allowances going forwards, with a view that such an approach might hopefully provide additional 'regular income' from CGT-related yearly sales, from zero-yield investments in my unsheltered shares-account, with my long-term rationale behind this JII purchase detailed here - https://www.lemonfool.co.uk/viewtopic.php?f=76&t=40842&p=618262#p618262
That's an interesting one - a more extreme version of what I've been doing with FCIT, which has now started looking decent again after a
decidedly disappointing few months. I had also bought some BRGE with the same idea in 2021 but after a promising start it got hammered by the Ukraine war and hasn't yet recovered.
I have a couple of JPM ITs but that one hadn't crossed my radar - will take a look.
Itsallaguess wrote:In addition to the above, I've usually got a fairly chunky additional layer of cash sitting in my unsheltered account, ready to be deployed early in any new tax-year, but I've been lucky over recent years to have had a regular excess over and above the ISA allowances, taking into account the fact that I've also been rotating out of single-share 'HYP-like' holdings in that unsheltered account and moving some of those funds into the new-ISA capital for ISA-related income-investment, so it's been an interesting journey for me in recent years to have to start thinking along the lines that you're also scratching your head about, and finding that even as a primarily income-oriented investor, the above solutions have been found to sit easy with me, and align with my investor-temperament really quite well, which has been a nice surprise.
Sounds like you're a couple of years ahead of me in your decision making so this is food for thought. I suppose I always knew there must be far more strategies and tactics that I should learn about investing than the LTBH and HYP-ish areas which were the first that made sense to me, but perhaps didn't expect that I'd need to utilise them.
Itsallaguess wrote:One thing I would add as a slight caveat to the above is that I'm still working and, if I allow myself to squint a little, there's a landing-zone in the medium term into what might be a non-working environment, and I think I'll probably find that when my wage-taps are finally turned off, any new ISA allowances will be much more difficult for me to fill from what would normally have been wage-related sources, but I do hope and plan to then be able to back-fill any post-work ISA allowances with some of the above unsheltered capital over a number of years after finishing work,
I'm also still working part time - I've cut my clients down to two and plan to stop completely in about a year. Only earning about 15k now but with having started taking the state pension and having rental income from a house I inherited I've had more cash (and paid more tax) than for the previous few years. Really I should have retired before now but my clients wanted me to carry on, I enjoy the work, and I was subsidising my girlfriend's expenses where she lives and didn't want to burn my earning bridges.
I should also have started thinking about this stuff properly before now but the last couple of years I've been very conscious of the fatigue caused by the rheumatic condition I developed and that I wasn't always in the best situation to make large financial decisions. Now that I'm almost back to normal it's catch-up time.
Itsallaguess wrote:Personally, I don't particularly see any of the above as me allowing the tax-tail to wag the investment-dog. For me it's just a sub-set of investment-processes operating slightly away from my normal income-investment strategy that's hoping to allow unsheltered capital to work at some level, within what's been a fairly rapidly-changing landscape in terms of unsheltered dividend and CGT tax-allowances. I've been lucky that for many years I've not had to fill out a self-assessment form, and I'm keen to keep things that way if it's possible, and fairly pain-free to do so...
That's an illuminating mindset and approach and it sounds like you're well sorted for the future. Maybe I've been allowing that same set of changes in dividend taxation and CGT allowances to over-complicate my thinking. Much to ponder. I may also broach the subject with my accountant - being self-employed I've used one for my tax return for about the last 16 years. While I don't expect "advice" it may be that they'll have a better feel for general investing tactics in the changing tax environment.
Many thanks for your considered reply, much appreciated.
cheers
Spiderbill