The Budget introduced changes to valuable tax allowances. However ISAs remain unchanged and are a trusted cornerstone for British investors. Have you considered using your full tax year Individual Savings Account (ISA) allowances?
Stocks and Shares ISAs are one of the options available, allowing you to invest up to £20,000 per tax year while enjoying significant tax benefits. Here’s why making the most of your full ISA allowance might be right for you:
- Tax efficiency: Any gains you make in this type of account are exempt from Capital Gains Tax and Income Tax. This means if your savings go up in value, or you take more income, you won’t owe any tax on those earnings. For higher-rate taxpayers, it can lead to even more savings. This makes ISAs one of the most tax efficient ways you can save for the future.
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- Flexibility: You may be able to withdraw ISA funds without penalties. While we recommend keeping your investments for the longer term to ride out market fluctuations, depending on your ISA terms you may be able to replace any withdrawn amounts within the same tax year without impacting your annual ISA allowance.
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- Growth potential: While all investments carry some risk (i.e. your capital is at risk and returns are not guaranteed), Stocks and Shares ISAs have historically outperformed cash savings over the long term. So they can be a great option if you’re looking to grow your wealth over time.
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In summary, a Stocks and Shares ISA is a valuable tool for UK investors looking to enhance their financial future. If you’d like to chat about how to make the most of this year’s ISA allowances, we’re here for you. Please give us a call at 0800 464 3079*, and let’s discuss your options.
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Market Commentary – Quarter 3, 2024