11-Dec-18

How to forecast for the next tax bill

We are living in an exceptionally turbulent period for UK investment, with low interest rates, high inflation and mounting political and economic uncertainty. For the investor, who is seeking to boost the value of their capital without exposing themselves to excessive risk, this is far from an ideal environment to make important financial decisions.

Consider this scenario to pay a tax bill:

You have a client who has a tax bill to pay in January 2020 of £100,000. They want to put their capital to work but also need the money to be available at that time.  However, with a short time frame of under 13 months, they can’t invest into most traditional market routes, which usually require a 5- 10 year view.

The client requires an intelligent, forward-thinking cash flow strategy. And with a tax bill looming in January 2020 and a limited time to decide the most effective way to make that money work, they need to act quickly.

What should they do?

Typically, clients will have funds sitting in cash. But, with bank and building society accounts often returning 1% or less, that money is not working particularly hard for them.

An ideal solution would be investing in a one-year, fixed rate investment that would enable the client to benefit from the predictability of a fixed holding period, as well as attractive interest rates over the investment term.

One such option would be investing the money into the Triple Point Income Service. The Income Service is designed to provide a fixed rate over a fixed term, whether that is over 1, 2 or 3 years, along with interest being paid either monthly or at maturity. With the current rate of Interest at 5.25%, for an advised client over a 1-year term, the investment in this scenario would produce a monthly gross interest of £437.50 or an annual interest payment of £5,250 at maturity.

Triple Point Income Service

Triple Point’s Income Service generates an attractive fixed return by providing funding through a single holding to thousands of carefully-vetted UK businesses.

The service is engineered to generate a predictable income stream which is uncorrelated to traditional listed equity and bond markets.

Investors benefit from Triple Point’s extensive experience as an investment manager in the Direct Lending sector. Funds raised are used to provide loans, leases and other asset finance to a large and diverse range of UK SMEs. As a leader in the private debt market, Triple Point currently manages over £350m of assets in lending and leasing strategies and has provided funding for over 100,000 businesses.

If you are looking to build a balanced investment portfolio that provides clients with dependable returns over a fixed term along with security that exceeds mainstream investments, including direct investments or equity funds, the Triple Point Income Service could be considered for part of the client’s portfolio. 

Risk Warning: As with all investments, the Triple Point Income Service places capital at risk. Investor’s may not get back the full amount invested, and interest is not guaranteed. We do not provide investment or tax advice. Tax treatment will depend on your individual circumstances and may be subject to change in the future. Please speak to a financial adviser, who can guide you if you are in any doubt. Investors should only subscribe to the Triple Point Income Service on the basis of the information and terms set out in the Information Memorandum and Investor Agreement.

Triple Point Investment Management LLP is authorised and regulated by the Financial Conduct Authority, firm reference number 456597. Triple Point Administration LLP is authorised and regulated by the Financial Conduct Authority, firm reference number 618187.

Find out more about the Triple Point Income Service here

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