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With the new UK capital gains tax rate at 20% (since the new budget of Wednesday), and the highest band of dividend rate at 32.5% or 38.1%, I think it makes sense to find investments that do not yield dividends. We can just sell some portion of it if money is needed.

I am thinking about this the right way? I find it difficult to find a good investment that does not yield dividends, as that's what most etf and shares will do.

What are the type of investments that deliver growth without dividends? Of course, some stocks do not pay dividends, but what else is there?

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    Note that there is now a dividend allowance of £5000pa. So unless you're expecting to receive a lot more than that in dividends every year, they're still worth receiving. – Steve Melnikoff Mar 18 '16 at 9:24
  • Product/service recommendations are specifically off-topic; but the first part of your question would be OK. Care to edit the question? – Chris W. Rea Mar 18 '16 at 12:44
  • I have modified it, hopefully more into the guidelines now? – DevShark Mar 18 '16 at 12:47
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    You can still hold dividend paying investments so long as you can sell out of them just before the ex-div date. Then you can convert your dividends into capital gains. However, be mindful of transaction costs. – SMeznaric Mar 19 '16 at 14:19
  • Great idea! A bit involved though. – DevShark Mar 19 '16 at 15:31
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If you expect to pay tax on dividends move dividend producing assets into your ISA. If have a lot of investments you can Look at Zeros (zero dividend preference share) issued by splits (split capital trusts),

https://en.wikipedia.org/wiki/Split_capital_investment_trust

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  • Thanks! I'll look at zeros. Are there zeros for ftse 100 companies? Is this as safe as the normal shares, or is there a risk with the intermediary structure creating the zero? – DevShark Apr 18 '16 at 10:22
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    They are companies listed in their own right - these are investment trusts not unit trusts. – Pepone Apr 18 '16 at 13:52
  • I see, so is there additional default risk? – DevShark Apr 18 '16 at 15:10
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    Be aware that back in the late '90s/early 200x's the split capital trusts lost more than a few people a lot of money. Google things like "split capital investment trust scandal" or "split capital investment trust crisis" for more info e.g news.bbc.co.uk/1/hi/business/4465039.stm They are certainly interesting financial instruments though. – timday Apr 20 '16 at 21:26

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