Collective Investment Account

The objective of a Collective Investment Account is to benefit from a portfolio of collective investments over medium to long term, at least 5 years. There is no set term to the arrangement. The portfolio of investment funds allows you to participate in a wider range of stocks. It also provides specialist investment expertise from experienced fund mangers who will usually specialise in their chosen field.

Collective Investment Account

How are they Valued?

The price of units in any Collective investment is governed by the value of the underlying securities and will fluctuate on a daily basis. The value of the plan can, therefore, go down as well as up.

How much can I invest?

All providers will have a minimum investment requirement. In general this would be a lump sum of £1,000 or a monthly amount of £50. Additional investments of £500 or £10 per month would generally be accepted. There is no maximum limit.

Fund Choice

Collective Investment Accounts offer a wide range of fund choices, with the advantage that each fund usually specialises in one particular sector. This allows a diversified portfolio. For example, you could invest in UK Equity, European Equity, US Equity, Property and Fixed Interest funds to form your portfolio.


Any income received from dividends and interest distributions will be automatically taxed at source, similar to building society interest. However, higher rate tax payers will be liable for additional income tax.

Non-taxpayers will not be able to claim any of the tax levied against dividends but may be able to reclaim, from the Inland Revenue, tax levied against interest distributions.

On full or partial encashment (including some regular withdrawals) there may be a liability to Capital Gains Tax (CGT) depending on the profit made. If your gains do not exceed the annual exemption, taking into account other disposals, you will pay no tax. Gains in excess of the annual exemption will be taxed at 18%. If you require further details, please contact our office.


Dividends from your plan can be re-invested into your plan to purchase further units and provide additional growth, or distributed as income, usually twice a year.

In addition some providers can make monthly payments of a fixed sum, made up of both income and capital gains.

Single or joint ownership

These plans can be written in joint names or on a single name basis. Under a joint plan the investment will continue until the death of both plan holders. Each plan holder has a full Capital Gains Tax allowance, and hence a jointly held plan can produce profits of twice the annual exemption before tax may be due.

Death benefits

100% of the current fund value is paid on death of the individuals investing and there is no liability to Capital Gains Tax.

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