ISAs are a tax efficient ‘wrapper’ denoting their tax status. The underlying investments should provide the growth and income.
Should you take out a Cash ISA or a Stocks and Shares ISA?
Well, a cash ISA is generally ‘safe’ depending on your annual interest rate. If inflation is higher than the interest rate, then you will suffer ‘inflation risk’. Also, for a basic rate tax payer, there is now a £1,000 annual tax free interest allowance so if your ISA is unlikely to breach this and you can get a better interest rate in a standard account then that may be worth considering instead. Of course, if you intend to contribute fully to your ISA every tax year to build up a very large cash pot, then an ISA will always be more tax efficient.
Stocks & Shares ISAs are allowed to grow without regard to Capital Gains Tax, Tax on Fixed Interest Payments or Dividends Tax. This means that ALL of the Global Stockmarket returns go back into your portfolio or to provide you with a tax free income.
We at EJF help our Clients by sourcing the underlying ISA investments and regularly reviewing these with the Clients in order to build a tax efficient retirement income.
EJ FINANCIAL LTD
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EJ Financial Ltd. Registered in England and Wales No 9370740
Authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register No 670594 at www.fsa.gov.uk/register.
The Financial Conduct Authority does not regulate taxation and trust advice.
The value of your investment can go down as well as up and you may get back less than you have invested.
The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
NOTE: None of the above constitutes advice, always consult a professional adviser before making any investment decisions.
Please talk to Ted on 01892 234884 or 01635 777795 for further information.
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Financial Review & Planning • Pension Contribution Planning • ISA Contribution • Pension Freedom Advice • Protection
Investment Portfolio Management • Tax Planning • Retirement Planning • Trust Investment • Portfolio Reviews