With the ISA deadline approaching on 5 April 2023, we highlight some leading investment trusts that can be bought and held in a stocks and shares ISA to provide tax free savings.
Investment Trusts are simply companies listed on the London Stock Exchange. They are often referred to as ‘closed-end’ funds because they have a fixed number of shares in issue which can be bought and sold like any other publicly listed company.
Most UK investment trusts can be bought and held within an ISA or SIPP. You can invest up to £20,000 in investment trusts in an ISA in this tax year 2022/23 – this is the current maximum ISA annual allowance. The deadline for using your ISA allowance is 5th April 2023.
In the new tax year 2023/24, the annual capital gains tax allowance is being cut from £12,300 to £6,000. This will reduce to £3,000 a year after that. In addition, the annual tax-free dividend allowance is decreasing from £2,000 to £1,000 in the new tax year. This will also be halved to £500 a year later. It’s therefore more important than ever to use up you tax-free allowance in an ISA investment so that your income and capital gains are protected from tax.
In this article, we’ve handpicked a mix of investment trusts from BlackRock, J.P. Morgan Asset Management, Premier Miton Investors and Fidelity that cover a variety of different regions and asset classes, depending on your preferred interests or investment strategy.
Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.
Miton UK Microcap Trust plc (LON:MINI) intends to invest primarily in the smallest companies, measured by market capitalisation and quoted or traded on an exchange in the United Kingdom.
JPMorgan European Discovery Trust plc (LON:JEDT) aims to provide capital growth from a diversified portfolio of smaller European companies (excluding the United Kingdom).
Fidelity Japan Trust PLC (LON: FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.
BlackRock Energy and Resources Income Trust plc (LON:BERI) aims to achieve an annual dividend target and, over the long term, capital growth by investing primarily in securities of companies operating in the mining and energy sectors.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
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