Unit Trusts
The Unit Trust is simply the taxable version of the Individual Savings Account (ISA). Authorised Unit Trusts provide a means of pooling investors' funds to buy shares in such a way as to reduce the costs of investment management and to spread the risk and opportunity more widely. Although not tax-free it is still tax-efficient. Unit Trust funds are exempt from capital gains tax (CGT). However, on encashment individual holders are liable to CGT on any profits, subject to each individual's CGT exemption, currently £9,600.00 per annum. In addition to shares, there are other assets available to invest into and all Unit Trust companies will offer a range of investment funds.
Dividends are paid with 10% tax deducted at source, with higher rate taxpayers having additional tax to pay.