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Reasons to Open an ISA every year

Posted by siteadmin on Thursday 27th of February 2020.

Reasons to open an ISA every year

Over 12 million people invested in an ISA last tax year. Why?

Here are the reasons:

Excellent tax benefits

ISAs offer the opportunity, over the years, to build a significant portfolio, free from UK income and capital gains tax. This is one of the key points; the more you invest and build up your ISA over the years, the more yield you are likely to see each year.

Generous tax free allowances.

This tax year, 2017/2018, investors can shelter up to £20,000, either as a lump sum or by setting up monthly payments, into an ISA meaning that couples can contribute £40,000 between them into ISAs and shelter their cash from tax immediately and for the future.

Free from capital gains tax.

ISAs allow investors to make sound investment decisions without worrying about future tax implications. An ISA is free from capital gains tax and UK income tax and as a consequence doesn’t need to be declared on tax returns.

Furthermore, you will have total control over your investments and when you can sell them to get the best return, which is essential in a fast changing investment market. As an investor you should use the tax saving vehicles available to you, provided they are suitable for your needs.

Full access and flexibility

Funds are always liquid for lump sum withdrawals but more importantly able to provide you with a monthly tax free income at any time. Ideal for tax free retirement income.

ISA savers and investors are able to transfer their accounts without restriction or tax charge, which means that they can move their ISA savings into the account which financially suits them best at that point in their life. A Cash ISA can now be transferred to a Stock & Shares ISA, and vice versa.

And finally, use it don’t lose it!

This tax year (2017/18) the ISA annual contribution level has increased by £4,760 which means you can now invest £20,000 across all your ISAs and protect your money from the taxman.

Remember that your 2017/18 ISA allowance must be used by 5th April 2018, you cannot ‘roll over’ your ISA investment allowance into the following tax year. If you don’t use your allowance before the 5th April then you will have missed out on the opportunity to shelter more of your savings and investments from tax. So make sure you invest your money each year.Your blog post goes here!

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