End of tax year reminder – use it
or lose it
With the tax year end fast
approaching, now might be
a good time to review your
investments and ensure
you’re making the most of the tax
breaks available to you.Your ISA allowance
The ISA allowance increases in line with the Consumer Prices Index (CPI) each year. For this tax year, which ends on 5 April 2012, the ISA limit is £10,680 of which a maximum of £5,340 can be held in a Cash ISA. This year’s Junior ISA limit is £3,600, and will remain at £3,600 until April 2013 after which it will rise in line with the CPI each year. Also, from 6 April 2012, the ISA allowance will rise to £11,280 of which the maximum you can hold in cash element will be £5,640.
Save tax
Whilst there is a limit on the amount that you can invest each year, the key point to remember is that, regardless of how long you hold your ISA, there is no tax to pay on any growth and no additional tax to pay on income received. When it comes to withdrawing from your ISA, any gains are free from Capital Gains Tax. Remember, with each new tax year, you have the opportunity to add more into an ISA. With an ISA from Alliance Trust Savings, as long as you subscribe each year, there is no requirement to complete a new ISA application form for each new tax year. We keep it simple, to make your life easier.
Consolidate to accumulate
If you already hold ISAs from previous years, the impact of ongoing charges and the way in which your portfolio is diversified is even more important. It may be appropriate to consider consolidating your ISAs with the one company. This will reduce the volume of paperwork you receive and you’ll benefit from receiving a single valuation for all of your holdings, which will allow you to manage your portfolio more effectively.
Top Facts
1. All growth within an ISA is tax free and there is no additional tax on income. Sale of assets and withdrawals will not incur capital gains tax.
2. You can invest up to £10,680 in the current tax year, but if you don’t use it, it will be lost forever.
3. Diversify your portfolio and spread your investment across a range of sectors.
4. Consolidate your ISAs with the one provider and significantly cut costs and reduce paperwork. With Alliance Trust Savings, you can manage all of your investments online.
5. If you have any questions about ISAs or other investments you should seek professional advice.
For full information about our ISAs, please visit our website.