With the new tax year just beginning and the last one fresh in our minds, I thought I would write about ISAs as I often find that these are overlooked.
ISA stands for Individual Savings Account, which were introduced on 6 April 1999, replacing the earlier Personal Equity Plans (PEPs) and Tax-Exempt Special Savings Accounts (TESSAs). PEPS date back to 1987 so the concept has been available for many years.
Since the advent of ISAs and their forerunners PEPs in 1987, it would have been possible to contribute over £375,000*1 into these tax efficient mediums, by utilising the maximum available allowance each tax year. We have seen individuals who have built up large ISA holdings, sheltering these funds from tax.
We also have to remind individuals to use the ISA holdings they have built up as most of the tax benefits are only available during their lifetime, although in most cases a surviving spouse or civil partner can inherit the tax benefits of the deceased’s accumulated ISA through an ‘additional permitted subscription’ or APS.
When comparing interest rates with Cash holdings the interest rate is not the only consideration, the type of product also has to be taken into account and this includes Cash ISAs. On a number of occasions recently I have seen these forgotten. In fact there are more than one type of ISA, so if you wish to gain further insight into these and the different risks involved, we offer a free consultation, so why not pick up the phone today and book a free, without obligation consultation.
*1Charles Stanley, 26th Feb 202
The content included on this page is based on our understanding of the UK tax
law at the time of publication.
It may be subject to change and may not be applicable to your circumstances.
