Aberdeen cash fund http://www.h-l.co.uk/funds/security_details/sedol/B1BW3H 9 Henderson cash fund http://www.h-l.co.uk/funds/fund_performance/sedol/04228 53 Blackrock cash fund http://www.h-l.co.uk/funds/security_details/sedol/05849 46
I've listed the 'Acc' version of these funds as they can, I hear, be used to minimise the tax liability on returns as follows. If you invest cash into an Acc fund, hold it for a while then sell the fund (or part of it) the 'interest' gained can, I believe, be treated as a capital gain, so you can offset it against your CGT allowance (currently around £9k I think) and so most of us would get the 'income' tax free.
With such attractive returns potentially available effectively tax free, even outside an ISA, with no ISA limit, I am thinking this looks very attractive. However what I don't fully understand is whether there is a risk to capital in investing in these funds. The 5-year charts indicate that there hasn't been for some time, but can anyone articulate the risks inherent in these funds?