From today, you are able to take advantage of the increased ISA allowance of £15,000 per person.  For Junior ISA’s this increases to £4,000.

Following on from our Early Bird ISA note, I thought it was worth repeating some of this information.  As you know, 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.

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.

However, if 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’. The advantage of doing the Bed and ISA now, is that you shelter the capital (and any growth or income) from tax over the whole year and not just in the weeks prior to the end of the tax year. 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.

If you want to top up your existing ISA, or if you haven’t yet made a contribution and want to use up your entire allowance, please let us know and we will confirm how to make payment.

If you have any queries, please do not hesitate to contact us.

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