Author: Helen Barklam

Gold is commonly regarded as a ‘safe haven’ asset. This is driven by the fact that on numerous occasions, gold prices have fared better than equity and debt markets in times of market turbulence. For example, the FTSE 100 fell from £73.03 on 21 February 2020 to a low of £49.93 on 23 March 2020 (a reduction of £23.10 or 31.6%) in response to the coronavirus pandemic. Over the same time period, gold rose from £1,262 per oz to £1,297 per oz (an increase of £35 per oz, or 2.8%). As a result, private investors commonly invest in gold as…

Stamp Duty Land Tax (SDLT) is applicable when purchasing a freehold, leasehold or shared ownership residential property in England. Since 3 December 2014, buy-to-let property and additional residential property purchases have attracted a Stamp Duty Land Tax (‘SDLT’) surcharge of 3% for acquisitions above £40,000. If you are just moving to a new house whilst selling your old house, then this surcharge does not apply and SDLT is calculated in accordance with the rules applicable to main residential property purchases – see our SDLT calculator for main residential properties. Stamp Duty Land Tax Calculator (buy-to-let or additional residential properties) Property…

There are certain speculative bonds (also known as high yield or junk bonds) which are often referred to as fallen angels or rising stars. If you’ve heard these terms and not been sure what they are, then this is the article for you. What are fallen angels? Fallen angels are simply bonds which were previously classified as investment grade, but have been downgraded to become speculative grade. Fallen angel bonds are typically downgraded to a BB rating which Moody’s describes as having substantial credit risk. Companies with current ratings of Baa3 are most at risk of becoming ‘fallen angels’ as…

When acquiring shares or trading in derivative contracts through execution only share trading platforms, there are a number of different types of share trade order that can be used. An ‘order’ is simply a request to acquire/dispose shares or open/close positions when trading derivative products. Not all order types are available across all platforms. Similarly, the length of time that specific order types can remain in place also varies between platforms. For example, one may only allow limit orders to remain in place during the current trading session whilst another may let them run for 90 days. It is therefore…

Stamp duty was first introduced in England in 1694 and originally covered all paper transactions such as gold/silver purchases, insurance policies, advertisements, newspapers and lottery tickets. Each of these documents required a physical stamp, hence the name. Stamp duty today has dramatically reduced in scope and is levied on security and property purchases, with other areas largely abolished. The ‘Stamp duty land tax’ refers to the tax levied on property purchases in the UK, which varies based on the value of the property purchase. This was introduced in its current form from 3 December 2014. However, stamp duty has been…

Every year, UK- based investors benefit from a capital gains tax (‘CGT’) allowance. This allowance means that up to a certain value (£12,300 in the 2020/21 tax year), UK individuals do not pay any capital gains tax on any profit they make on disposal of assets. If unused, the capital gains tax allowance cannot be carried forward to the following tax year. This ‘use it or lose it’ style rule meant that investors holding assets such as individual shares or holdings in funds would sell their assets prior to the end of the tax year before quickly repurchasing them in…

This guide starts with the basics of what fixed income investments are and expands to explain how bonds are priced, how credit rating agencies grade bonds and how best to cost effectively invest in fixed income investments. What are fixed income investments? Fixed income investments are debt investments where you are effectively loaning money either to Governments (gilts or gilt-edged securities, also known as treasuries or sovereign debt) or companies (corporate bonds). When you make a fixed income investment in a gilt or corporate bond, the lending Government or company typically agrees to pay you a fixed rate of interest…

Investment funds pools the capital of many individual investors to invest in one or more types of underlying financial securities. In the UK, investment funds are either open-ended investments companies (‘OEICs’) or Unit Trusts. Investment funds typically hold shares (which pay dividends), bonds (which pay interest) or a mixture of both. These dividends / interest payments are forms of income. The type of share (in the case of OIECs) or unit (in the case of Unit Trusts) you hold determines how this income is treated. Income funds With income shares/units, income from the fund is paid out to investors in…

What are share options? Share options are a type of financial security. When investing in share options, you are purchasing a contract which gives you the right (but not obligation) to buy or sell a certain number of shares at a fixed price either at any time before the option expires. Investors pay a premium for this right. Option contracts can also be taken out on other markets such as bonds, commodities, forex markets and stock market indices. How do share options work? There are two types of share options – call options (a contract to buy shares at a…