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ISA Investment Advice

isa investments advice

ISAs (sometimes called NISAs) are tax-efficient savings and investment accounts. You can use them to save cash or invest in stocks and shares. On 1 July 2014, Cash ISAs and Stocks and shares ISAs were merged into a new single ISA (ISA).

There are not many circumstances in which you can beat the taxman. But investing in an ISA is one of them. ISAs are simply tax-free or tax-efficient accounts for your savings or investments.

An ISA, or Individual Savings Account, is not an investment in its own right. The best way to think of an ISA is as a 'wrapper' in which people can shelter savings and investments from tax.

Do I need an Isa?

Anyone with savings or investments should have an Isa. It is a key item that can build an effective savings strategy.

Because earnings on money saved in an Isa are protected from tax

Unlike a standard savings account, any interest earned on money saved in a cash Isa will not be taxed. If you opt for a stocks and shares Isa, there is no capital gains tax on profits and no tax on interest earned on bonds.

You can start with small amounts - some cash Isas can be opened with as little as £1 and save up to £11,520 each tax year, of which £5,760 can be saved into a cash Isa.

How much can be invested in an ISA?

This tax year (April 6th 2015- April 5th 2016) up to £15,240 can be invested in an ISA.

The ISA allowance can be split as desired between a Cash ISA and a Stocks & Shares ISA. The ISA subscription can be withdrawn whenever needed, although once withdrawn from a Stocks & Shares ISA it cannot be put back in without counting as a new subscription.

What's the difference between a cash ISA and an investment ISA?

Cash ISAs are a good way to save for the short-term. They usually offer good rates of interest compared to bank and building society accounts with the advantage that you don't pay tax on the interest.

Investment ISAs are for stockmarket investments. They are worth considering if you want to save for the longer term and are willing to take a risk with your money.

You can switch the money you have in a cash ISA into an investment ISA but you can't put money from an investment ISA into a cash ISA. So it's worth remembering if you do switch to an investment ISA you won't be able to put it back into a cash ISA if your investment doesn't perform as well as you would have liked.

If you are interested in putting your money into an investment ISA, we can give you some objective advice and can help you to decide whether this is the right choice for you.

Flexible ISAs

Within a Cash ISA, it has recently been announced (2015 Budget) that, from Autumn 2015, capital can be withdrawn and replaced without savers losing their tax-free allowance, provided it takes place in the same tax year.

Help To Buy ISA

A new ISA will be introduced to help first time buyers save towards the cost of buying their first home in autumn 2015. Savers will be able to make an initial deposit of £1,000 when they open a Help to Buy ISA and then receive £50 for every £200 saved up to a maximum of £12,000. The tax break will be capped at £3,000.

You'll also be able to earn tax free interest on your savings as with a standard ISA. These new ISAs will be limited to one per person rather than one per house. You won't be able to contribute to a Cash ISA in the same tax year.

Junior ISAs

Junior ISAs offer a great way to save tax-efficiently for your children. Family and friends can put up to £4,080 a year into the account on behalf of the child and there's no Income Tax or Capital Gains Tax to pay on the interest or investment gains (but tax at 10% is deducted from dividends). Available to any child under 18 living in the UK who doesn't qualify for a Child Trust Fund.

Our advisers can give you some sound advice on putting your money into an investment ISA, they can help you to decide whether this is the right choice for you.


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