“With the Government always looking for ways in which they can generate more revenue for the ‘Government coffers’, the number of options for tax efficient investing has reduced significantly in recent years, with many tax breaks being altered or removed in their entirety. However, ISAs have survived and remain a great tax efficient savings vehicle – particularly for higher rate tax payers. In these times of austerity, we believe it is more important than ever to make sure you are maximising your ISA allowance on an annual basis.
The maximum which can be paid to an ISA in the current tax year is £11,280 of which up to £5,640 can be saved in cash. Alternatively, you can save the entire £11,280 into a Stocks and Shares ISA. Therefore, a married couple could pay up to £22,560 in the current tax year into an ISA and benefit from tax free growth.
Another benefit of investing tax efficiently through an ISA wrapper is that it exacerbates the effect of compound interest on the investment. For example, if a couple invested their ISA allowance annually over the next 20 years, assuming a 5% yield per annum, this could be worth £783,266 which could be partly or fully encashed without being subject to either income or capital gains tax.
We believe ISAs play a very important part in an overall wealth management strategy. To find out more information please visit www.killik.com/isa, or contact your nearest branch.”
Killik & Co is authorised and regulated by the Financial Services Authority. The value of investments and the income from them may fall as well as rise and you may not get back the amount invested. Past performance of investments is not a guide to future performance. The tax treatment of investments may change with future legislation. You should always seek financial advice before deciding to invest in the stock market.