Step-by-Step - How to enter an unwrapped investment

What is an unwrapped investment?

In Voyant we use unwrapped investments as the catch-all category for all manner of taxable investments that are not subject to the special tax treatments enjoyed by certain investment products such as stocks and shares ISAs, bonds (onshore and offshore life funds), Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EISs), offshore taxable accounts, Discounted Gift Trusts (DGTs), and a broad range of other trusts. These special types of investments are all modeled separately under their respective investment Type

OEICs, unit trusts, equity holdings, stocks and shares, individual equities, businesses and even properties can all be modeled under the guise of unwrapped investments. Unwrapped investments are taxable, being subject to potential Capital Gains Tax (CGT), provided that the investment is modelled as having capital appreciation. Basic rate tax is also deducted automatically from capital growth, unless the software is specially set not to take these deductions annually. Unwrapped investments can also be set to yield annual dividends and interest, when appropriate.

 

To add an unwrapped investment to a plan: 

1. Select Investments in the left navigation.

 

2. People: Begin by selecting the owner of the investment in the People panel, located on the right side of the screen. If the investment is owned jointly, tick both of the co-owners.

A check mark will appear next to each selected owner. 

 

3. Type: Select Unwrapped Investments.

Learn more >> about how the investment Type is used.

 

4. Account Name: Enter a name for the investment.

The name you enter must be unique within the plan.  This is to say, you cannot have two investments in John's case file named identically "John's Investment Account". 

Tip: You are not required to enter an actual account number nor do we encourage you to do so. Simply give the investment an appropriately descriptive name, one that you and your client will easily recognize during future meetings. 

 

 

5. Balance £: Enter the current balance of the investment as of the beginning of the plan.

Is this is a hypothetical future investment?  If the investment has no balance today, as of the beginning of the plan, but will be funded in the future through regular contributions or future transfers, enter a starting balance of £0. The investment will act as an empty account awaiting the receipt of funds in the future. Future contributions to the account can be tracked later in the Let's See charts and in the Balance Sheet Overview

 

6. [Annual] Contribution £: If your client plans to make contributions to the investment, enter these either as a total annual amount or as a percentage of earnings (from employment). For example, an entry of 8% would mean that the client plans to contribute eight per cent of his future salary to this investment, if possible after paying expenses. 

Note: If you do plan to make regular future contributions to this investment, you must also set the time span over which these contributions will be made. Contributions are scheduled on the Time panel on the right side of the screen, as will be explained in step 9. 

Read more >> about setting annual contributions on investments.

Tip: Apart from making regular contributions to this investment, the software also has a facility for scheduling transfers between accounts as well as one-off lump sum contributions. If your client plans to make a future one-off contribution or to move funds between accounts (e.g. scheduling a Bed and ISA by moving funds from this unwrapped investment into an ISA), use the Advanced Settings > Transfers / Additional Contributions panel. Read more >> 

 

7. Purchase Value: Enter the current cost basis of the investment as of the start of the plan. This amount should take into account any previous withdrawals.

If you are entering a proposed, hypothetical account – one that has a zero balance at the start of the plan that will be funded at some point in the future – leave the Purchase Value set to zero. The software will know to add any future contributions made to the investment's cost basis.

Voyant maintains a ratio of cost basis to capital appreciation and will apply this ratio anytime some or all of the investment is liquidated.

Read more >> about setting the purchase value (cost basis) on investments.

 

8. Annual Percent Gains Realised: This is strictly an optional setting designed to help you model the regular annual sale of holdings within an investment without the withdrawal of any funds from the investment.

If the investment holds capital gains, a realisation of these gains would result and depending on whether they exceed the owner's (or owners') gains allowance and carried forward capital losses to date, might result in the assessment of Capital Gains Tax, which would be payable in the following year of the plan.  

This setting could be used to help model the realisation of your client’s annual gains allowance, although it is not designed expressly for that purpose.  Read more >> about setting gains to be realised annually. 

 

9. Time (Scheduling Contributions): If you plan to make regular future contributions to this investment, schedule them by making selections on the Time panel, to the right side of the screen. Your selections will set the time span over which contributions will be made to the account.

If you do not plan to make regular contributions to the unwrapped investment - i.e. you've made no entries in the Contributions fields above - there is no need to make any selections on the Time panel. 

To schedule future contributions:

Go to the Time panel, on the right side of the screen and select the panel’s Event tab.

Next, select a pair of events.

- Select a start event (green dot) to indicate the year in which contributions are to begin.

- Select an end event (red dot) to indicate the year in which contributions are to end.

If you need instead to schedule a single, one-off contribution, select a start event (green dot) without selecting an end event (red dot). Read more >> about scheduling onetime contributions. 

Learn more >> about using events to set the contribution period for an investment.

 

10. As a best practice, always take a brief moment to note the line graph at the bottom of the screen. This graph represents the general growth trajectory of the investment, including planned future contributions.  Read more >>

 

Job done!

And that completes all that is required to enter an investment in Voyant. You may now click the Add button to save the investment into the plan,. However, before finishing, a word about the advanced settings, should you need them. 

  

Advanced Settings

Additional settings and options are available under Advanced Settings. These special settings are “beneath the fold” to prevent the entry of an investment from appearing too daunting. Everything you must consider is above, in plain sight. However, these advanced settings are available whenever you might need to set the software to handle things in a special way and trust us, at some point you will.

Growth, Asset Allocation - Probably the most important of these advanced settings are the Growth & Yield and (if used) the Asset Allocation settings. We do generally recommend you give these two settings at least a cursory review to ensure that the investment’s assumptions for future growth and account fees are set appropriately. Read more >>

Other advanced settings are:

Contributions – Specify the income source that is to be associated with investment contributions. Read more >>

Liquidation Limits and Planned Withdrawals - Should you need greater control over the cash flow, liquidation limits allow you to limit or prevent the software from taking ad hoc withdrawals from a liquid asset. Planned withdrawals, on the other hand, allow users to set a withdrawal schedule from an account, regardless of whether these funds are needed to fulfill expenses. We generally recommend that you use these settings very sparingly and let the software do cash flow calculation for you, but these options are available should you need to take a more hands-on approach to cash flow or when considering certain what-if scenarios. Read more >>

Step Up / Step Down – Use events or in some cases stages to schedule future increases or decreases (steps) in employee and employer contributions, growth rates, as well as future changes to asset allocations (and hence, derived growth rates). Read more >>

Transfers / Additional Contributions – Set future transfers of funds into an investment from other accounts or in years where there are large lump sum inflows, from surplus income. Don’t confuse transfers with regular contributions, which are set using the contribution fields. This feature is also not intended to be used for crystallisations – i.e. transfers into drawdown investments. Crystallisations are scheduled on the Investment screen under Withdrawals and Annuity > Drawdown Strategy / Drawdown Investment. Read more >>

  

Save your work. 

11. Click the Add button to save the investment into the plan.

Note that additional settings and options, such as growth (as well as capital growth dividends and interest), fees, and asset allocation are available under Advanced Settings.  Read more >>

 

The investment will be shown in the ledger, located on the right side of the screen.

To later view or edit the investment, first it in the ledger. Details will be displayed in the fields left. 

To move on to another entry after viewing and possibly editing the details of an investment, click Clear.

 

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