Clarke Nicklin Financial Planning - leading providers of Independent Financial advice looking after the whole of your personal and corporate affairs.

Take control over where your money is invested tax-efficiently

Each tax year, we are each given an annual Individual Savings Account (ISA) allowance. The deadline to add to the tax-efficient accounts is at midnight on Tuesday 5 April 2017. It is a ‘use it or lose it’ allowance, meaning that if you don't use all or part of it in one tax year, and you cannot take that allowance over to the next year.

The ISA limit for 2016/17 is £15,240, increasing to £20,000 in 2017/18.

Withdrawals to increase your income

Income from an ISA doesn’t affect your personal allowance or age-related allowance, and there’s no Capital Gains Tax (CGT) payable on any growth you may achieve. This means you could use withdrawals to increase your income when necessary.

Withdrawals from an ISA are tax-efficient

ISAs can give you control over your retirement income, as you can take as much money out as you like, whenever you want. Savings in an ISA and withdrawals from an ISA are tax-free. If you are a pension saver, you can generally also take out as much money as you like, whenever you want from age 55. Currently up to 25% of the pension pot can be withdrawn tax-efficient with additional withdrawals taxed at the applicable marginal rate of Income Tax.

Types of ISAs and allowances

Cash ISA - Anyone over the age of 16 can put their cash savings into a Cash ISA. Accounts can be either instant access, have notice periods or have fixed terms.

Stocks & Shares ISA - Anyone over the age of 18 can put individual shares or managed funds into a Stocks & Shares ISA.

Innovative Finance ISA - This ISA is for investments in peer-to-peer lending platforms. You must be over the age of 18 to invest.

Help to Buy ISA - To help first-time buyers over the age of 18 get on the property ladder. You can start with a lump sum deposit of up to £1,200. You can then save up to £200 a month.

For every £200 you save, the Government will add 25% up to a maximum bonus of £3,000. It's available per buyer, not household, so if you are saving with a partner, the bonus potential is up to £6,000 towards your house deposit.

Junior ISA - Cash or investments can be wrapped in this ISA on behalf of children under the age of 18. The Junior ISA has an annual allowance of £4,080. You must be a UK resident or crown employee to invest in any type of ISA.

Sheltering your money from tax

ISAs are becoming an integral part of financial planning. However, it is important to remember that an ISA is just a way of sheltering your money from tax. It’s not an investment in its own right although they offer a unique range of benefits.

Its worth considering other investments strategies too, such as:-

Smoothed Investment returns

Cash – Safe liquid, FSOS protection

Equity portfolio

Expert professional investment advice

Choosing how you invest will depend on the level of risk you are comfortable taking with your money, as well as factors such as how soon you will need to access your money. If you require individual expert professional advice to beat the ISA deadline on 5 April, please contact us to review the most appropriate options for your particular situation.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.


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Clarke Nicklin Financial Planning is a trading name of CNFP LLP, registered in England, company number OC324909. Registered Office: Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Stockport, SK8 3TD. Email: enquiries@cnfp.co.uk

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