2015 ISA Investments
As the new tax year has started, I wanted to remind you about the ISA allowances you have available to you now.
ISA’s are one of the most tax efficient and flexible means of saving. Each year we remind you to ensure that your ISA allowance is used up, either through new funds that become available, or from moving funds from other investments that you hold. This will mean that over time you are building up a tax efficient fund which can be used to provide a tax free income in the future. The current ISA allowance is £15,240 each and £4,080 for a Junior ISA. We will always send you a reminder to top up your existing ISA’s towards the end of the tax year but the earlier you can move funds into a tax efficient environment the better.
Please let us know if you want to make your ISA contributions now and we will send over the payment instructions.
Cash sitting on deposit?
If you have cash sitting on deposit which you are not looking to access over the short term, then it makes sense for this to be held within the ISA environment so you can take advantage of the tax free growth over a longer period.
Existing Investments outside ISA?
Assuming that you do not have any new cash readily available, investments held outside an ISA can be sold and the proceeds reinvested, this time within an ISA. This process is known as ‘Bed and ISA’ and for some of you, it is likely that we have been through this with you before and have done this already.
The money will be invested in either case and so it makes sense that it is invested in the most tax efficient way. You should note that the sale of an investment outside of an ISA may create a capital gain and may be subject to capital gains tax, however if this is the case we will let you know first.
You all know the benefits of ISA investing, so why not be the early bird this year and take advantage of the extra time in the tax free environment.
Moving Child Trust Funds (CTF’s) to Junior ISA’s
As many of you are already aware, from 6th April this year, you are able to move funds from existing Child Trust Funds into the Junior ISA environment. This freedom should widen the investment choices for these funds and hopefully give more of an opportunity for improved performance.
At the moment, the providers that we would usually use for Junior ISA investments are not currently offering the ability to transfer CTF’s. We are pushing them to make this functionality available as soon as possible and will be back in touch as soon as we have some more news.
If you want any more information, or you want to know how to make a payment, just let us know.