Taxable and tax-advantaged portfolio management for UK personal investors.
British Tax Review, 2008
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This article makes some observations on the interaction of UK taxation and portfolio decisions by a personal investor managing his own investments in quoted company shares. Three holding vehicles are considered: two types of tax-advantaged account (ISAs and SIPPs), and taxable holdings registered directly in the investor’s own name or a nominee (personal account). Some observations are made on ways in which portfolio management of a taxable account differs from management of a tax-advantaged account. Simple models are used to illustrate the difﬁculty of producing post-tax out-performance from active management of a taxable account. Guidelines are suggested for the type of investment to be allocated to each type of account, for turnover in each type of account, and for decisions on switching between investments held in a taxable account.
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