Still time to top up your ISA

Now that the infamous 31 January deadline has passed it is time to start thinking about the current tax year and maximise any available tax reliefs by 5 April 2018. The ISA limit currently allows for taxpayers to invest up to £20,000 per year.

Whilst the amount invested in an ISA does not benefit from tax relief the income and gains are free from most taxes including Income Tax and Capital Gains Tax. Eligible holdings include cash ISAs, stocks and shares ISAs and finance ISAs. Account holders may make withdrawals at any time without the loss of tax relief. The £20,000 limit can be used in one account or split across some or all the available options.

It is also possible for qualifying taxpayers to invest up to £4,000 of the £20,000 ISA limit in a Lifetime ISA. The Lifetime ISA is designed to help those aged between 18 and 40 to save for a new home or for their retirement. Under the scheme, the government provides a 25% bonus on yearly savings of up to £4,000 and once you start saving before you are 40, you can continue using the scheme until you turn 50. The money invested in a Lifetime ISA can be used for other purposes but will be subject to a 25% withdrawal charge.

There are also Junior ISAs available for under 18’s which were introduced to encourage children to save money. The returns from Junior ISAs are also tax-free and are usually locked until the child reaches 18. The annual subscription limit for Junior ISAs is currently £4,128 and will increase to £4,260 in 2018-19. The ISA limit will remain at £20,000 for the next tax year.

Posted in HMRC notices

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login

Forgot Password?

Latest News

Finance Bill receives Royal Assent

The Finance Bill 2017-18 officially known as Finance (No.2) Bill 2017-19, received Royal Assent on 15 March 2018 following agreement …
Read More

Marriage allowance still time to apply

The marriage allowance is available to married couples and those in a civil partnership, where a spouse or civil partner …
Read More

Directors beware National Living Wage complications

From 1 April 2018, the National Living Wage (NLW) will increase by 33p to £7.83. This represents an increase of …
Read More

Twitter Feed