Tax-Efficient Investing
Definition
What is Tax-Efficient Investing?
Structuring legitimate investmentAn asset or commitment of money made with the expectation of future income, growth, or both. choices to reduce unnecessary tax while following applicable law.
Example in practice
How This Looks in Practice
An investorA person or organisation that commits capital with the expectation of a financial return. compares the after-tax returnInvestment return remaining after applicable taxes. of two products rather than choosing only the higher headline yield.
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Related Terms
Withholding Tax
Tax deducted at source from specified income payments before the recipient receives the balance.
Tax TermsCapital Gains Tax
Tax that may apply to gains from disposing of qualifying assets.
Tax TermsTax Authority
A public authority responsible for administering and collecting taxes.
Risk TermsMarket Risk
The possibility of loss because broad market prices or rates move against an investment.