ISA Planning

The ISA allowance is something that can strangely be both under and over appreciated by people, dependent on their perception of it. Understanding the rules and advantages of the various ISAs available inline with your own personal situation is something that can be a powerful planning tool.​ The ISA allowance for the 2020/21 tax year has remained the same as last year at £20,000 and this can be spread across each of the four types of ISA available to you.

The four types of ISAs are:

The basic premise of any ISA is that you do not pay tax on ​ interest on cash in an ISA ​ income or capital gains from investments in an ISA. ​This can be especially useful for those who have large investment or cash holdings outside of any tax-advantaged wrappers. By ‘sheltering’ as many of these assets as possible in ISAs, you are potentially reducing ongoing tax bills.​ However, with the respective allowances we all have for both interest and dividend income and capital gains, striving to get everything into ISA where possible isn’t always required.

Nothing contained in this article constitutes or should be construed to constitute investment, legal, tax or other advice. The information contained in this article shall in no way be construed to constitute a recommendation with respect to the purchase or sale of any investment.