With rising tax rates, there is an increasing interest in tax-efficient savings vehicles. Maximum Investment Plans (“MIPs”) are one such vehicle.
MIPs allow a cash sum (ranging anywhere from £10,000 to £2m) to be invested every year for ten years. Provided the specified annual investments are made for at least seven and a half years, the proceeds of the plan on maturity will be tax-free!!!
MIPs can hold a wide range of cash and equity funds and provide the flexibility to move from one asset class to another (i.e. from equities into cash) without triggering a tax charge.
MIPs are likely to be of particular interest to higher and additional rate taxpayers, those seeking additional savings options to complement pensions and ISAs and those looking to save for a specific event (such as university or school fees).