Unit Trusts
Unit Trusts and Open Ended Investment Companies (OEICS) invest in a similar way to the Equity ISA element but do not have the same tax advantages.
A Unit Trust or OEIC can provide a wide range of holdings in different units or shares, thus offering much more security than would be available from buying shares direct. Professional investment management provides two further benefits: specialist expertise that should provide better performance and a reduction in the administrative burden of looking after individual holdings.
Growth within these contracts is taxed and any income received is also taxed. Higher rate tax payers will have a liability for further tax even if the distribution is retained within the contract. Encashment can lead to a Capital Gain Tax liability in certain circumstances.
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