Posted on: 10 Jan, 24
Investing in an Individual Savings Account (ISA) is a tax-efficient, flexible method for future planning. One of the most attractive features of an ISA is its tax benefits – it’s immune to both Income Tax and Capital Gains Tax on any growth within the fund or on income you withdraw. This makes contributing to an ISA an intelligent decision for those looking to grow their wealth while minimising tax liabilities.
If you utilise your annual ISA allowance before the end of this tax year on 5 April 2024, it will be recovered and reset on 6 April. Maximising your ISA allowance is crucial to reap the full benefits of this savings tool.
There are four types of ISA available for adults:
The 2023/24 ISA allowance currently stands at £20,000. You can split this allowance however you wish, so long as you don’t exceed it within the ‘only one ISA of each type’ subscription rule that applies in the current tax year.
The Cash ISA is arguably the most straightforward form of ISA. It offers a tax-efficient avenue for your cash savings to earn interest. You generally have the choice between a variable or fixed interest rate. With a variable rate Cash ISA, you’ll likely get a lower interest rate but can withdraw funds when needed. On the other hand, a fixed rate Cash ISA might provide a slightly higher interest rate but typically requires you to leave your money untouched for a predetermined duration...
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