Tax breaks are no substitutefor stockpickingskills

Tax wrappers and tax efficient vehicles are good ways for investors to maximise the cash they put aside, but they should remember that the quality of the underlying investment is a greater priority than tax breaks

Choose clients' tax wrappers wisely and always remember that while tax breaks enhance returns they are no substitute for good stockpicking skills. There is a wise tax planning adage that warns, 'never look a gift horse in the mouth but do check for Greek soldiers elsewhere in its anatomy'. The point in this context is that the very generous tax breaks associated with quoted and unquoted smaller company shares do not come risk free, and no amount of tax relief will offset the impact of investment in duds. Tax breaks, therefore, should be used wisely in accordance with the client's specific n...