Don’t be one of the countless thousands who miss out on using their tax-efficient allowance before 5th April.
Individual Saving Accounts otherwise known as ISAs provide you with the opportunity to make a generous tax free saving each year, as there are no deductions of capital gains tax or income tax on each return.
ISAs themselves are not an investment but instead a wrapper that allows you to save money without the hassle of losing profit to capital gains tax and income tax.
It is free to open an Individual Savings Account and whatever you save over the year will be tax-free.
Even if you withdrew part of your funds, you will not pay tax on this amount. However, this is permanently discounted from your yearly allowance.
Here are 3 great reasons for getting in touch today.
- Bespoke portfolio - matched to your investment requirements and individual needs.
- Annual reviews - to keep your investment on track, grow and preserve your wealth & meet your savings goals.
- Scalable advice - so we can provide you with the highest level of financial planning no matter your budget.
An ISA does not need to be mentioned on a tax return, and tax rules often change year upon year. Qualifying for an ISA is dependent on individual circumstances. In previous years, ISAs were called Mini or Maxi ISAs. A Mini ISA is now labelled as the stocks and shares ISA or cash ISA and shares in the Maxi ISA automatically became a stocks and shares ISA.
More Benefits of ISAs
ISAs are Free of Income Tax
If you are a higher rate taxpayer, an ISA is particularly valuable. If you received a £100 return on a dividend, you would have to pay £25.00 on income tax. However, if this money was invested in a tax efficient ISA, there would be no income tax to pay. This is worthwhile especially if your tax rate bracket is due to increase in the future, and there is no guarantee that the Government will not alter the current tax bands and force more people into a higher tax rate bracket in the future.
Pay No Capital Gains Tax
When you open an Individual Savings Account, there is no capital gains tax to pay on the yearly allowance. This is reassuring to anyone who decides to open an ISA.
Tax Efficient Bonds
If you held bonds on your ISA, the generated income would be free of capital gains tax and income tax. This is especially useful if you decide to use your funds as an income source, perhaps as retirement looms. If you feel no current need to invest in bonds, you may want to rethink moving equity funds into bonds for the future, especially if you may need to withdraw an income or diminish the level of risk in your financial portfolio, as you grow closer to retirement.