There’s still time to use your ISA and JISA allowances By Peter Pearson Independent Financial Adviser, Tenet&You
With the end of the tax year (5 April) in sight, now is the ideal time to double check you’ve taken full advantage of all your annual allowances with an experienced Financial Adviser assessing your options.
A
n Individual Savings Account (ISA) is a common account often associated with tax year end as it is a special type of account that gives you the opportunity to save or invest a certain amount of money every year, without having to pay tax on any growth in your investments or savings. However, it is important that you don’t leave it too late to act or you’ll run the risk of missing out, 50
as you can’t carry over any unused allowance to the next tax year. So if you have cash you won’t need access to in the short term, now’s the time to invest it.
contributions subject to annual and lifetime limits, ISAs are a very useful tool in topping up retirement income. There is no Income Tax or CGT payable on ISA proceeds.
Your ISA Allowance
In certain circumstances, investors can use existing holdings to open or top up their ISAs, this arrangement is known as a Bed & ISA. This is a way of transferring assets held outside an ISA into an ISA so that future investment income and growth are sheltered from tax. The investments are sold, cash is transferred into the ISA and the investments are repurchased. Charges apply and you could end up with a CGT liability if the gain you make on selling the asset, together with any other taxable gains you make within the tax year, exceeds the annual CGT allowance.
Standing at £20,000 for the 2021/22 tax year, you can save or invest up to this amount each tax year into either a Cash or Stocks and Shares ISA whilst shielding any interest, dividends or capital gains from tax. You can also adopt a mix and match approach, putting some into Cash, some into Stocks and Shares and the rest into Innovative Finance if you wish. However, the combined amount must not exceed your annual ISA allowance of £20,000. With pension
LANCASHIRE & NORTH WEST MAGAZINE
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