The Atticus Papers

Bringing clarity to finance

Friday 30th July, 2021

Should I be investing in cryptocurrencies? - An investor's guide to the Bitcoin conundrum

"Should I be investing in cryptocurrencies?" This seems to be the question on everybody's lips at the moment, from experienced, long term investors to those who have never considered investing before, but don't want to miss an opportunity to turn a quick buck. I have been asked this question by numerous clients and friends and also been in a number of fairly heated debates on this topic, with one individual accusing me of selling my clients short by not actively encouraging them to purchase a portfolio of cryptocurrencies. Like everybody else out there, I have questioned whether I am missing a trick here. It is hard not to be tempted by the lure of massive returns on your money over an incredibly short time. I have therefore looked at it as forensically as I can to determine whether there is any merit to holding cryptocurrencies for the investors I work with. Now, it is important to point out that I work with medium to long term investors. If you are looking for an investment that will triple in value over a year, I am probably not your man. In order to answer many of the questions I am asked, I have put together a fairly in-depth article to look at all aspects of cryptocurrency. I will look at the historical aspects of asset bubbles and also look at whether a cryptocurrency is an investment or a currency, or neither. I will look at the hurdles (government regulation, corruption, market manipulation) facing cryptocurrencies and whether these are insurmountable or not. I will end with a summary of my views and whether long term investors should be holding cryptocurrency or not. I hope you find this article useful, but if you have any questions, please feel free to give us a call. We are always happy to help.

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Monday 26th July, 2021

How to invest in smaller companies and start-ups - A guide to Enterprise Investment Schemes, Venture Capital Trusts and AIM portfolios

"How can I invest in smaller, newer, growth companies and Start-ups?" It is probably the dream of every investor to go out and find a brand new start-up that very few other people have access to, buy up some equity in the business and then watch as it goes stratospheric. It's like Captain Ahab's quest for the great white whale, hopefully just a little less self-destructive and fruitless. Despite the fact that this is often perceived as the preserve of the institutional investor (your Gordon Gekkos of the world), many retail investors have not given up hope of finding a start-up to invest in with the possibility of finding the elusive 10 bagger (10 x original investment) investment or higher. After all, it doesn't take much. I had a friend who invested £15,000 in ASOS, when it first floated on AIM, and watched (firstly with shock and then undisguised glee) as it grew to £250,000. In the article below, I will look at a number of different investment vehicles which retail investors (that's non-professional investors) can use to gain access to investment opportunities in start-ups and smaller, riskier, growth focussed companies. We will look at Alternative Investment Market (AIM) portfolios, Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT). We will look at what they are, how they work, and the advantages and disadvantages of utilising them as an investment option. It is important to note that, although these investments carry large growth potential and tax benefits, they are incredibly risky. It is therefore crucial to take advice before investing in any of these investment vehicles and it is important that you are careful about how much of your portfolio you choose to invest in them.

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Tuesday 13th July, 2021

Discounted Gift Trusts – how to gift away assets and retain an “income” from them

Many people are aware that they have an Inheritance Tax liability, but feel that they cannot afford to do anything about it, as they rely on their excess assets to provide an income to meet their expenditure requirements. They are asset rich and income poor. Unfortunately, there does not seem to be a way to gift away the assets, while retaining access to the income generated, without falling foul of the Gift with Reservation rules. However, the Discounted Gift Trust offers an option to give away the asset, while carving out a right to "income" from the assets for life. In the article below I will explain what Discounted Gift Trusts are, how they work, their advantages and disadvantages and who they might be suitable for.

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Friday 9th July, 2021

What are investment wrappers? - a guide to investment tax structures in the UK

What is meant by an investment tax wrapper? Financial advisers are often accused of using obscure industry jargon, when talking to clients. I know that I am sometimes guilty of this and I think any professional tends to unintentionally fall into the phrases that they feel most comfortable with, when trying to explain something which may be quite complex. For the adviser, this may be fine, but for the client it can be incredibly frustrating and confusing. One of the phrases most often bandied about by financial advisers is the term “tax wrapper”. When I look at it objectively, it is a very confusing phrase. It sounds like something you should get if HMRC suddenly started their own clothing line! However, it is a remarkably important phrase and it is crucial that investors understand it, as it goes right to the heart of how an individual makes their portfolio as tax efficient as possible. In the article below, I will explain what a tax wrapper actually is, highlight some of the more common tax vehicles and explain some of their most important features. This can be quite a complex area, so please don’t hesitate to give us a call if you have any questions. We are always happy to help.

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Tuesday 6th July, 2021

How much can I contribute to my pension? - A guide to funding your pension (UK)

How much can you contribute to your pension each year? This is a crucial question, as knowing the answer will put you in a strong position to build your pension pot and take advantage of the fantastic tax reliefs on offer. However, there are also many pitfalls and if you contribute too much to your pension, this can result in an unforeseen Annual Allowance tax charge. It is therefore very important that you have a broad understanding of the rules relating to pension contributions and what your options are. The article below will explain the pension Annual Allowance, pension carry forward principles, The Tapered Annual Allowance for high earners, the Money Purchase Annual Allowance and the impact of exceeding your annual pension allowance. It will also cover how contributions are made and tax relief provided.

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