http://ukadventureracing.co.uk/wp-json/oembed/1.0/embed?url=http://ukadventureracing.co.uk/forums/ Individual Savings Accounts (ISAs)
ISAs come in various forms, including the Stocks & Shares ISA, for tax-efficient investing.
You can invest up to £20,000 a year (tax year 2020/21) in a Stocks & Shares ISA, and all capital gains, interest growth and dividend income from these investments are protected from tax.
If you’ve used your ISA allowance, you may wish to consider paying into accounts for your partner (who also has a £20,000 annual ISA allowance in this tax year) and your children (who have a £9,000 annual ISA allowance in this tax year). Bear in mind that the money will be in their names and will legally be theirs.
Pensions are designed primarily for retirement saving and can usually be accessed from the age of 55. Not only do pensions offer protection from tax on capital gains, interest growth and dividend income (like ISAs), but you’ll also receive tax relief on your contributions. Higher rate taxpayers receive tax relief at 40%, while additional rate taxpayers receive 45%.
There is a limit on the pension contributions you can receive tax relief on, which in the current tax year is capped at £40,000 a year (or 100% of your salary if your salary is lower). But if you have contributed less than your limit in recent tax years, you may be able to pay in more this year.
If you have an annual income of over £200,000, you may have a lower limit on contributions and should obtain professional financial advice to assess your options. If you are approaching your Lifetime Allowance on pension savings, currently £1,073,100 (tax year 2020/21), another investment vehicle may be more tax-efficient.
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.
THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF