Tax planning for high earners

Tax planning strategies to help high-earning clients find additional ways to make tax-efficient investments.

Helping your highest earners invest tax-efficiently

People know that pensions and ISAs offer tax reliefs within certain allowances. But there are high-earning clients who’ve exhausted these allowances or could benefit from other ways to invest tax-efficiently.

Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS) investments invest in early-stage companies. Investors can claim certain tax reliefs which act as an incentive to take on the risk of investing in smaller companies. Read more about the risks.

Let’s look more closely at planning ideas you could use to help the high earners in your client bank.

Planning ideas

Planning ideas for clients

Additional rate taxpayers

Scenario

Clients who earn a large salary, have used their ISA and annual pension allowances, and want to continue to invest tax efficiently.

Opportunities

With a high annual income that exceeds amounts that can be invested in pensions and ISAs, these clients could benefit from making incremental tax-efficient investments which will reduce their annual income tax liability

Solutions

Venture Capital Trusts (VCTs)
Enterprise Investment Scheme (EIS)

Risks

Risks to keep in mind

Capital is at risk

The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

Tax relief can’t be guaranteed

Tax treatment depends on individual circumstances and tax rules could change in the future. Tax reliefs depend on the VCT and portfolio companies maintaining their qualifying status.

The investment may be volatile and difficult to sell

VCT shares and the shares of smaller unquoted companies, could fall or rise in value more than other shares listed on the London Stock Exchange’s main market. They may also be harder to sell.

Contact us

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Key documents

Key documents

Octopus Titan VCT brochureDownload
Octopus AIM VCTs brochureDownload
Octopus Apollo VCT brochureDownload
Octopus Ventures EIS Service brochureDownload

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