Income drawdown schemes

Several fund managers market income drawdown schemes within their fund ranges. If you are a UK taxpayer, these can look very tax-efficient. UK authorised unit trusts and Oeics, as well as offshore funds with distributor status, are subject to a very favourable tax regime in relation to capital gains. Firstly, within the fund itself, the fund manager can deal in the underlying shares on a regular basis without incurring capital gains tax liabilities (CGT), so the fund acts like a gross roll up vehicle in relation to capital gains. On encashment of units, the gains on UK authorised and offs...