Individual Savings Accounts (ISAs) are one of the most popular ways to save.
With exemption from income tax and capital gains tax it’s easy to see why they are the main choice for savers.
The ISA savings limit for the tax year 2019/20 is frozen at last year’s limit of £20,000, meaning you can pay up to £20,000 into one ISA account (or across multiple ISA accounts) tax-free.
There are five main types of ISA: cash ISA, Help to Buy ISAs, innovative finance ISAs, stocks and shares ISAs, and now the Lifetime ISA.
There is also a Junior ISA, which will provide a child with a tax-free lump sum when they reach the age of 18; this allowance has raised from £4,260 to £4,368.
“The ISA allowance is set by the government each year, so the allowance doesn’t roll over to the next tax year, so if you don’t use it you will lose it,” said Peter Way-Rider, tax manager at Ellis & Co.
“You can open multiple ISAs but cannot pay in more than £20,000.
“To gain maximum benefit from your ISA you should open it at the start of the tax year (April 6), failing that as close to this date as you can.”
For further information on ISAs or any other tax issue contact Peter on 01244 343504.