Glossary

A tax wrapper is a financial product that allows individuals to hold investments within a tax-efficient structure. 🌐

Tax wrappers provide tax advantages, such as tax deferral, reduced tax rates, or tax-free growth on investments. These products encourage long-term saving and investment, and they often come with specific rules and restrictions.

Example: In the UK, an Individual Savings Account (ISA) is a popular tax wrapper. Investments held within an ISA are exempt from capital gains tax and income tax. Each tax year, individuals have an ISA allowance, which limits the amount they can invest in ISAs.

Fun fact: The first ISAs were introduced in the UK in 1999 to encourage saving and investing among British citizens. 🇬🇧 Since then, they have become one of the most popular savings vehicles in the country, with millions of people using them to save for their futures.