Why hold cash in the UK when offshore is better? says Smith & Williamson

Smith & Williamson Investment Management has moved its UK based cash trust to Dublin to enhance investor returns. 

From 6 April 2008, changes announced in the Budget mean that income from an offshore cash fund is taxed in an even more preferential way compared to equivalent UK cash funds. UK resident and domiciled individuals with investments in the Smith & Williamson Cash Fund will pay less tax on income than from similar UK-based funds. For example, a higher rate taxpayer would typically pay an effective tax rate of 25% rather than 40%*.

 ‘‘The change in location of this fund and improved returns come at a time when investor nervousness is heightened not least because of uncertainties in the banking sector. Many investors do not want to hold cash with one institution, are concerned about falling interest rates, falling stock markets and rising inflation," said Angus Duncan, a director at Smith & Williamson.

"This is a managed cash fund operating in the wholesale markets so an individual's investment is spread across a range of institutions. Therefore the fund achieves better returns than a normal deposit account, spreads risk and provides safety from volatile stock markets."  Duncan added: "This fund could be an ideal place to park up until the smoke clears.''

"The fund has a minimum investment of £1,000 and so enables people with relatively small deposits to achieve returns which exceed the rates typically offered by bank or building society accounts, and have access to their money within 48 hours without any penalties."

Supplementary information 

The fund is priced daily enabling investors to buy and sell shares each day. Money can be withdrawn at one day's notice with settlement one day from the dealing day. There is no initial charge, however there is a facility for Advisors to levy a fee, and the annual management charge is 0.7% with no exit fee although a dilution adjustment may apply for large withdrawals.

The fund is suitable for pensions and charities as well as individual investors.

*The fund is only suitable for UK resident and domiciled taxpayers.

The 25% tax rate for higher rate taxpayers only applies where the individual owns less than 10% of the shares in a given company.

Important Information

Please remember the value of investments and the income from them can go down as well as up and you may not get back your original investment. Past performance should not be seen as an indication of future performance. Change in rates of exchange may have an adverse effect on the value, price or income of the investment. Investors should be aware of the additional risks associated with funds which invest in emerging or developing markets. Investments in higher yielding bonds issued by borrowers with a lower credit rating may result in a greater risk of default and have an adverse effect on income and capital value. This document contains sources of information believed to be reliable but no guarantee, warranty or representations, express or implied is given as to their accuracy or completeness. This is neither an offer nor a solicitation to buy or sell any investment referred to in this document. This document is for the information only of the recipient. It is not to be reproduced or copied or made available to others. Smith & Williamson funds are not registered under the Securities Act (1933) of the United States of America and the Smith & Williamson companies are not registered under the Investment Company Act of the United States of America. Consequently, the funds may not be offered for sale or sold in the United States of America, its territories or possessions or protectorates under its jurisdiction nor to nationals citizens or residents in any of those areas. Smith & Williamson and its affiliates and/or their officers, directors and employees may own or have positions in any investment mentioned herein or any investment related thereto and may trade in any such investment. Smith & Williamson documents may contain future statements which are based on our current opinions expectations and projections. Smith & Williamson undertakes no obligation to update or revise any future statements. Actual results could differ materially from those anticipated.

Smith & Williamson Investment Management is a trading name of Smith & Williamson Investment Management Limited. 

Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Note to editors 

Smith & Williamson is an independent professional and financial services group employing over 1,400 people. The group is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices and mid-to-large corporates. The group operates from offices in London, Belfast, Bristol, Glasgow, Guildford, Maidstone, Salisbury, Southampton and Worcester.

Smith & Williamson Investment Management is part of the Smith & Williamson group.

Smith & Williamson Limited

Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International, a worldwide network of independent accounting firms.

Smith & Williamson Investment Management

A trading name of

NCL Investments Limited

Member of the London Stock Exchange
Authorised and regulated by the Financial Services Authority

and of

Smith & Williamson Investment Management Limited

Authorised and regulated by the Financial Services Authority