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Best tax efficient ways to invest money

Investing money can undoubtedly be a tricky business, and often entails having to do ample research to find the most lucrative method. Another consideration many investors have to factor into their decision-making process is how much tax they may end up paying on any profits they make. Luckily, there are actually many tax efficient ways to invest money, so here are some of the options available to you.


Standing for an individual savings account, an ISA is one of the most common ways for people to invest their money, as it is completely free of tax on interest, dividends, and capital gains. This means that you can generate an income which is completely your own as well as having a choice over where you invest your money, and you can invest efficiently over many years.

They do have their limits, though, as you can usually only invest up to a certain amount at any given time. This means that your return on investment may not be as high as you would like, but ISAs are still an effective means of diversifying your investment portfolio.

Spread Betting

This is one of the riskier ways to invest money, but once again the profits you make are entirely tax free. Spread betting is usually done through an online broker and can be done on almost any asset, such as spot metals.

It involves speculating on the price movement of any given security/asset between the bid and the ask price (i.e. whether it will be lower than the bid or higher than the offer), and if the price moves in your favour then you make money. Since market movements are unpredictable, this is certainly seen as a riskier form of investment, but it is still extremely tax efficient.


Self invested Personal Pensions (Sipps) offer generous tax relief on investments, as well as a great choice over what you invest in. A Sipp gives the investor greater tax relief the more income tax they pay, so is especially suited to those earning more.

The downside is that you cannot access the money until you are retired, but you have far greater potential to build a healthy portfolio of investments, provided they are well researched and make a profit.

These are just some of the investment options which could help you earn more through paying less or no tax. Be sure to research your investments thoroughly and keep your portfolio diverse if you wish to keep investment risk at a minimum.  


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