Remy Investments employs several strategies to reduce taxes and enhance after-tax returns for our clients.
One effective approach is “asset location,” which involves placing less tax-efficient assets—those generating taxable income rather than capital gains—in tax-deferred accounts like Stakeholder Pensions and Self-Invested Personal Pensions (SIPPs).
For most of our clients, ordinary income (e.g., interest) is taxed at a higher rate than long-term capital gains. By holding these assets in tax-deferred portfolios, clients can control the timing of withdrawals, deferring taxes until funds are accessed, often at more favorable tax rates. This strategy results in permanent tax savings.
Key Strategies
Tax loss harvesting involves selling a security in a taxable account at a loss to capture a capital loss, which can offset future portfolio income or gains, reducing tax liability.
Another approach is prioritizing investments with high after-tax returns. Clients in higher tax brackets (federal and/or state) may benefit from municipal bonds, which offer attractive after-tax returns due to their tax-exempt status.
The Bottom Line
At Remy Investments, we prioritize tax efficiency in portfolio construction and trading. By employing strategies like asset location and tax loss harvesting, we aim to maximize what clients keep after taxes. Small tax savings can compound significantly over time, ensuring your wealth grows effectively.