ISAs

ISAs are a simple, tax-saving opportunity and anyone with savings should make an ISA their first port of call.  ISAs are a government-run initiative, introduced in 1999 to replace PEPs and TESSAs and they allow everyone access to a proportion of tax-efficient savings.  There are two main types of ISA: Cash ISAs and Stocks and Shares ISAs.

Cash ISAs

Cash ISAs are simply savings accounts where the interest isn’t taxed. There is a limit on the amount of capital that can be invested each year (£5100 per year for 2010/11). This tax efficiency makes Cash ISAs an attractive savings account for many investors.

Just like normal savings accounts, there are different types of cash ISAs available, such as instant access, fixed rate, and accounts with base rate guarantees.

Stocks and Shares ISAs

There are various ways in which to turn share based investments into ISA savings. Shares in individual companies may be placed inside what’s called a self-select ISA, or unit or investment trusts can be purchased; these are a collection of investments which have been carefully selected by a fund manager.

There are two key tax advantages to putting share investments in an ISA wrapper. Any profits made from share price increases aren’t eligible for capital gains tax and furthermore, all the tax on bonds can be reclaimed. It should be noted that some tax is still paid on dividend income from the shares held within an ISA.

PK Group can help you locate the best ISA deals to meet your requirements.  For more information, please contact your PK Group Advisor today.  If you haven’t worked with us before, please do get in touch and one of our specialists will be happy to assist.