Investing for Income (dividends and/or interest)

[ArranP]

good news, HMRC just confirmed interest from banks and UK corporate bonds is treated as dis-regarded income for non-residents not claiming a personal allowance.

They said, when filling out the self assessment, to claim the personal allowance, and the system will then determine which is the lesser amount, a) to claim the personal allowance or not to claim the personal allowance and dis-regard the investment income.

The bank interest goes in the "UK interest" section and UK Corporate Bonds interest goes into the "Accrued Income / interest scheme" on the self assessment, the software does the rest in calculating the liability.

Edited February 17, 2016 by ArranP

[ArranP]

Treasury 5% 2025
GBP | GB0030880693 | 3088069 5.000% "7 March 2025" 130.845

Due to its buy price, the return on this is a measly1.3% per year, in other words the market has price out 75% the value of this bond for a prospective buyer.

I'm guessing the way to get a better return is to register for the IPOs ? Other than IPOs is it possible to get a descent return from bonds ?

Edited February 18, 2016 by ArranP

[ArranP]

GBP 27 Nov 2015 Barclays Bank Plc 6.875 27 Nov 2049 - 33 yrs 9 mths 100 6.434

GBP 17 Feb 2016 Tesco Plc 5.5 13 Jan 2033 16 yrs 11 mths 87.229 6.792

GBP 17 Feb 2016 Direct Line 9.125 27 Apr 2042 26 yrs 2 mths 117.449 7.387

GBP 17 Feb 2016 Paragon 6.125% 2022 6.125 30 Jan 2022 5 yrs 11 mths 93.873 7.417

I'm new to bonds, why wouldn't you invest in these bonds ?

Barclays Bank, Tesco, Direct Line, Paragon all big names in the UK, maybe I'm wrong but unlikely to go bust, bonds have between 5 years to 33 years to run, returning 6.4% to 7.4% per year "running yield".

Edited February 18, 2016 by ArranP

[chiang mai]

Tesco just suffered a massive balance sheet black hole and is now trying to dispose of its overseas operations, their days are numbered as the UK's number supermarket, Llidl and co are eating market share.

Barclays, who'd buy banks in these days of negative interest rates, ring fencing, government fines, et al!

Direct Line, possibly.

It seems to me Arran you need to put 90% of your energies into company analysis rather than just looking on the internet to see which shares/bonds people are recommending, either that or diversify so much that your mis/bad-buys don't hurt you too much.

And and, chasing yield alone is a mugs game, there's an old saying, more money has been lost chasing yield than through any other single means! So if you're attracted by a 6.4%/7.4% return you have to ask yourself, why is the return that great, could it be because of the risk involved!

[ArranP]

Tesco just suffered a massive balance sheet black hole and is now trying to dispose of its overseas operations, their days are numbered as the UK's number supermarket, Llidl and co are eating market share.

Barclays, who'd buy banks in these days of negative interest rates, ring fencing, government fines, et al!

Direct Line, possibly.

It seems to me Arran you need to put 90% of your energies into company analysis rather than just looking on the internet to see which shares/bonds people are recommending, either that or diversify so much that your mis/bad-buys don't hurt you too much.

And and, chasing yield alone is a mugs game, there's an old saying, more money has been lost chasing yield than through any other single means! So if you're attracted by a 6.4%/7.4% return you have to ask yourself, why is the return that great, could it be because of the risk involved!

I'm not the best in the world at company analysis. Diversify, what would you recommend, a diversification of 10 ?

Edited February 18, 2016 by ArranP

[chiang mai]

I was thinking more about diversification of asset types, bonds, equities, Treasuries, cash (CD's), gold, etc., and within each product type further diversification of products, depending on the size of your portfolio - but you can alwys start small, say two of each.

But actually, if you're not the worlds best at company or balance sheet analysis, maybe you should pay someone to do it for you, that's what IFA's as for.

[ArranP]

Edited February 18, 2016 by ArranP