Company Investments

Unit Trusts / Investment Trusts For Retained Company Monies

The downside of direct holdings such as shares is the investment risk. This of course may be diluted via investment across a broad spread of stocks although the administration of such may become unwieldy.

Investment into collective investments such as unit trusts or investment trusts is an alternative to a direct holding. The tax treatment of these investments is generally the same as direct holdings.  However, they may be considered to be more attractive investments because they offer a spread of risk and because the trust manager can deal in the underlying assets within the trust without crystallising a tax liability. They also offer this spread without the administrative burden of holding each and every holding directly. 

It must be borne in mind that unit and investment trusts are sector specific and in order to move from an underlying investment of, for example, UK equities to European equities, it is necessary to dispose of one holding and purchase another.  This creates additional costs as well as crystallising a Corporation Tax liability.

Within these investments there are a wide range of fund options, including gilts, corporate bond, property, and equities, including managed and sector specific funds. Furthermore exposure may be obtained via these.

These can be held directly or alternatively the underlying taxation can be varied by putting such investments inside an investment bond.