Financial Services > Investments > Securities

 


This is a generic term used to describe shares, debentures (loans to businesses), gilts, bonds issued by governments other than the UK and permanent interest sharing shares relating to industrial, provident or building societies.

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Income received from any security will be subject to UK Income Tax. Where a tax credit for 20% accompanies that income, there is no further Income Tax to pay for basic rate tax payers. Profit made on the sale of securities (either at maturity or mid term) are subject to Capital Gains Tax.
Every UK tax payer is allowed to make gains of £11,300 in the 2017/2018 tax year before any Capital Gains Tax is payable. The tax is calculated by taking the cost price and the available allowances away from the sale proceeds after expenses. Whatever is left is divided between the number of owners of the investment and added to their taxable income. This means that most people would pay 18% tax on that balance.

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They can be held directly or through collective investment schemes such as a Unit Trust, Open Ended Investment Company (OEIC), UCITS, SICAV, ICVC, Investment Trust or even a Capital Investment Bond offered by an insurance company.