Maximise your tax free investments and reduce your own tax liabilities

The current 2013/14 tax year ends on April 5th 2014, and when it does, this year’s allowances and limits will be lost. This is important for savers and investors, as while there are allowances which will increase in the next tax year, others will decrease. Maximising these allowances and limits is a key part of successful financial planning, so it’s essential to understand what these are and how to use them. ISAs are one of the most tax-efficient investment options for individuals.

There are two types available; Cash ISAs and Stocks and Shares ISAs. The overall limit for investment in the current tax year is £11,520 (up to half of which can be in a Cash ISA with the remaining allowance available for a Stocks and Shares ISA), rising to £11,880 in the 2014/15 year. ISA regulations state that income from them is free from
personal income tax, capital gains tax isn’t chargeable following encashment, they can only be held by individuals and that no more than the investment limit can be paid in to an ISA in the one tax year,regardless of any withdrawals. ISAs are a very popular type of investment, due to their advantageous tax treatment, ease of accessibility and the option available to invest either lump sums or regular contributions.

Author: Simon Claxton | March 7th, 2014

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Simon Claxton
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767   info@macbeths.co.uk