Here's how UK's rich investors can invest their money wisely - Business Insider

which allows shares in alternative investment market stocks to be passed on without inheritance tax.

Coles said there was no guarantee this generous limit will remain post-pandemic, and that investors should act now to avoid future changes. "The allowances usually change at the turn of the tax year but the ISA allowance has changed mid-year before now," she added.Pensions are a tax-efficient way to build your retirement pot. Your contributions are effectively topped up by the government through pension tax relief.

The annual contribution limit for the 2020/2021 tax year is £40,000, and the lifetime cap is £1,073,100. You would need to contribute more than £3,300 a month to get to the £40,000 limit during a year, but a high earner may easily come close to this.HNW individuals often earn more than the combined ISA and pension caps each year.

An EIS is similar, but isn't listed, and provides 30% income tax relief of up to £1m. That allowance doubles if you invest in knowledge-intensive companies that specialise in research, development or innovation.Investors can sell assets such as shares outside of an ISA and earn £12,300 from the profits before paying any tax. This is known as the capital gains tax allowance.

Additionally, the income and gains earned from an investment bond are charged at the basic 20% rate, rather than 40 or 45%, making them useful tools for high earners.It may be worth sharing savings and investments with a spouse so that you can combine your reliefs and tax allowances. This is especially useful if one partner earns less — they would pay lower tax on, for example, cash savings.

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