 |
 |
|
|
|
|
|
Contact us | www.future-financial.co.uk | E-mail your comments | Archive | |
|
|
|
|
|
|
|
|
|
Increased ISA limits A change in the rules for Individual Savings Accounts (ISAs) could give a boost to tax efficient savings for older people now and others soon.
Those aged 50 or over can now make total ISA investments of up to £10,200 in the current tax year (younger people can do so from April 2010). Those who have already put in the previous maximum of £7,200 should now be able to add another £3,000 (£6,000 for a couple) and from 6th April, the limit will be £10,200 for everyone. Why use ISAs? ISAs can make a significant contribution towards tax efficient longterm savings. After all, money within an ISA grows free of UK taxes on capital gains and income (except the 10% withholding tax on dividends from UK companies, which can no longer be reclaimed by either pensions or ISAs). This is, of course, a benefit to most investors and one that can make quite a difference to the rate at which funds grow over long periods. There is no tax relief on ISA investments, but how monies are treated when benefits are taken is much more flexible than under pensions. ISAs can pay out a lump sum or income totally free of tax, at any time. And on death, any money that has not been paid out is still the property of the estate (although personal representatives will have to account for tax on any income or gains arising after death). Cash or equities? ISAs can hold a range of assets including shares, government bonds and insurance policies as well as up to half their value in cash. Because of current market conditions, some investors may be concerned about placing all their money into equities at the moment, in case of a market reversal. Switching later Fortunately, the rules permit investors to put money into cash now and then switch it into equities at any time in the future without affecting the investment allowance limits for the year in which a switch is made. It is not, however, possible to switch from equities to cash. It is important to take professional advice before making any decision relating to your personal finances. As ever the value of investments is not guaranteed and will fluctuate; you may get back less than you put in. Key Points: > Investment limits are rising already have for some > Investment choices include cash and shares > You can switch from cash to shares later |
|
|
 |
|
|
|
©futurefinancial This publication represents our understanding of law and Inland Revenue practice as at the date of publication. It does not provide individual tailored investment advice and is for guidance only. Rules may vary for Scotland and Northern Ireland. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. The value of land and buildings is generally a matter of a valuer’s opinion rather than fact. The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Your home may be repossessed if you do not keep up repayments on your mortgage. Loans are subject to status and written details are available on request. Always seek independent advice from a qualified financial adviser. Think carefully before securing other debts against your home. Fees for mortgage advice maybe charged and for details of these please contact us. The Financial Services Authority does not regulate all the activities undertaken by the company, including taxation advice and overseas mortgages. |
|