Investec Guinness Flight has launched its Capital Accumulator Trust in response to reducing tax-free investment allowances.
The trust will invest in zero dividend investment trust preference shares which are expected to offer a redemption yield of 6.25 per cent.
Growth accumulated under zero dividend preference shares is technically treated as capital rather than rolled up income, it is therefore subject to capital gains tax instead of income tax. Thus gains can be offset against annual CGT allowances.
The minimum investment is £1,000 lump sum or £50 a month.
The initial charge is 5 per cent and annual management charge of 1 per cent. But until July 30 there is a 2 per cent discount on the initial charge reducing it to 3 per cent.
Commission is available at 3 per cent initial and 0.5 per cent renewal.