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Tax Efficient Savings & Investments

Many of us will be familiar with Individual Savings Accounts (ISAs), as a way of minimising taxes paid whilst saving. ISAs are tax efficient savings and investment accounts which can be used to save cash or invest in stocks and shares, or a mixture of the two.

Recent changes however now make ISA's more attractive. The new ISA (NISA) now has a limit of £20,000 per individual for the tax year 2017/18, but this can only be in a cash ISA if you are aged between 16 and 18, otherwise it is your choice and you can switch to and from cash and stocks and shares.

You pay no income tax on the interest or income that you receive from an ISA and do not pay any Capital Gains Tax on the profits from any investments.

Younger people can also save tax free, with Junior ISAs available so that you can save and invest on behalf of a child under 18. Any funds invested will belong to that child. However, please note that whilst they can manage the account from 16, they cannot withdraw funds until they are 18. The current limit is £4,128 for the tax year 2017/18.

There are also other forms of Tax Free Savings, including:

National Savings and Investments are backed by HM Treasury. When you invest in NS & I, you are lending your money to the government and in return you receive interest, income or tax free prizes, dependent upon the investment. NS & I products are cash based and some are free from income and capital gains tax.

Venture Capital Trusts, Enterprise  Investment Schemes and Seed Enterprise Investments Schemes are all designed to allow you to invest in small, qualifying companies. They offer significant tax incentives but are specialist and high risk, so they are not for every investor.

Always Independent regularly reviews client savings strategies, ensuring that they maximise tax free allowances.

Should you have any questions about tax free savings, or your savings and investments strategy overall, we would be delighted to arrange a no obligation meeting. 

 

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