ISA (IndividualAccount) allowances are set to increase again from 6 April 2012.
This will be the second year in a row that the allowance has risen in line with inflation which as has been in excess of 4% in the last 12 months. Therefore, anyone over the age of 18 will be able to invest up to £11,280 in a Stocks & Shares ISA for this tax year as well as the £10,680 before the 5th April if they have not already done so.
It is possible to invest the full allowance in a Stocks & Shares ISA or you can Pick ‘n’ Mix investing up to half the annual allowance in a Cash ISA, and then the balance in a Stocks & Shares ISA.
For example, someone saving £3,000 in a Cash ISA will have £8,280 left to invest in the stock market.
Junior ISA will also be available for those under 18 and into these it will be possible for parents, grandparents or anyone else that is so inclined to save up £3,600 each year for the child with all the same tax advantages as for its bigger brother.
It goes without saying, risk tolerance and time horizons are important in helping decide which combination you choose. Please bear in mind that ISA allowances expire at the end of a tax year and any unused allowance does not roll over to the next; it is lost for good. It’s a case of use it, or lose it. ! ISAs are flexible enough to allow both lump sum investments and regular contributions, and we think that it is fair to say that most of the well known and highly respected fund mangers and economists now agree that Stock markets are priced very cheaply and there is an expectation that prices will start to rise steadily in the coming years to bring their valuations back to a more normal historic level. Investing in a stocks and shares ISA could help you to take advantage of this situation.
Benefits of ISA’s
All of us can benefit from having an ISA, as after the tax year ends, your savings stay within the tax-efficient ISA wrapper which will be free of Income and Capital Gains Tax. There is little point in making a taxablereturn if you can achieve the same gain in a tax free way.
The problem for most people is deciding how best to invest their money!
ltd can offer you help and advice on how to select the right investments for your ISA funds from the whole of the market, irrespective of whether you are a cautious, adventurous or ethically minded investor Haven IFA can help select the right investments for you.