ISA and Pensions Update
Take advantage of your tax efficient savings options now!
All funds held in Individual Savings Accounts (ISAs) and Pensions are largely free of income tax and capital gains tax. As such using these products to reduce your tax bill makes good tax planning sense.
Now we have entered the 2023/24 tax year, your ISA and pension allowances have reset and are available to be utilised.
The benefits of making an investment to the markets early in the tax year are:
1. Your monies are invested sooner allowing more time for growth.
2. Holding money in cash deposit accounts for longer allows the real value of your monies to be eroded over time due to the effects of inflation.
3. Any interest earned on cash deposits is subject to income tax.
What are the current allowances?
The amounts available to be invested into these products are as follows:
Individual Savings Accounts (ISA) – you can invest up to £20,000 per individual in ISA in this tax year. The ‘Junior’ ISA allowance is £9000.
Personal Pensions/SIPP – you can invest up to £60,000 gross per individual. With tax relief for a higher rate taxpayer, the cost would be £36,000 net and for an additional rate taxpayer the cost would be £33,000 net. Contributions may be limited to the higher of your earned income or £3,600. You may also be able to make use of unused allowances in any of the previous 3 tax years.
What do I need to do to invest?
If you wish to look at options for investing, or clarify the allowance available to you, please contact your adviser directly for advice or complete the enquiry form below.
