Smith & Williamson Investment Management has moved its UK based cash trust to Dublin following tax changes in the Budget.
From 6 April 2008, income from an offshore cash fund is taxed in a more preferential way compared to equivalent UK cash funds.
This means UK residents 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 pay an effective tax rate of 25% rather than 40%.
Angus Duncan, a director at Smith & Williamson, comments: ‘‘The change in domicile 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 and are concerned about falling interest rates, falling stock markets and rising inflation.
“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. This fund could be an ideal place to park up until the smoke clears.”
The fund has a minimum investment of £1,000 and is priced daily. Money can be withdrawn at one day’s notice with settlement one day from the dealing day. There is no initial charge although a facility exists for advisers to levy a fee. The annual management charge is 0.7% with no exit fee although a dilution adjustment may apply for large withdrawals.
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