Individual Savings Accounts (ISA) were introduced over 20 years ago, in the last millennium even, and have always been a very tax-efficient way of investing, with no liability to either Income Tax or Capital Gains Tax on the invested funds. These days ISAs offer the opportunity to invest up to £20,000 annually per person.
Unlike pension allowances, ISA allowances cannot be reclaimed from previous years. Therefore, if you are intending to utilise this year’s allowance then it is important to arrange any investment within the tax year or risk losing it.
Furthermore, most platforms schedule their final deadlines for 23rd March to account for BACS payment delays and administrative turnarounds.
Equity-based ISAs are intended to be medium to long-term investments, so any funds that you are considering investing should be funds that you are unlikely to need in the near future.
We recommend thinking of these as 5-year plus investments.
Money can be withdrawn from your ISA at any point with no redemption fees, although the underlying value of the investment is not guaranteed. The value of any investment may fall as well as rise, so you may get less out of your investments than you initially invested – especially in the early years.
We have made investing into an ISA very easy – investments can be as a lump sum or via a monthly direct debit – and can be set up in less than 5 minutes. However, all instructions will need to be placed before Wednesday 23rd March to guarantee funds reach the account before the end of the tax year.
If you would like to make use of this year’s ISA allowance, then please contact your Wealth Strategist.
