Fixed Term ISA

FIXED TERM ISA INVESTMENT

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Individual Savings Accounts (ISA) are tax exempt stocks, shares, cash and finance accounts whereby income – interest and dividends – is obtained is tax free. With ISAs, any capital gains tax on any capital growth are also exempt.

Investors have been using ISAs, Individual Savings Accounts, to buy, hold and sell investments within a tax-efficient wrapper. Typically, investors are expected to pay tax on any capital gains or income that are earned from the investment. However, with ISAs the tax is not an issue. Every tax year, there is a tax allowance issued for ISAs. For this year, 2018/2019, the allowance is currently at £20,000.

 

 

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MARKET OVERVIEW
  • From 2017 to 2018, the amount investors were able to invest in an ISA increased by approximately a third from 15,240 in the previous tax year to £20,000.
  • According to Hargreaves Lansdown, the number of investors that save on a regular basis into individual savings accounts increased by 40% between January 2016 and November 2017 to a total of 74,010.
  • According to Bestinvest, the total number of investors that save using direct debits on a monthly basis has also increased this year by 19% in comparison to the previous tax year.
BENEFITS
  • ISAs are a tax free investment as any returns made on an investors ISA does not need to be recorded in their tax returns. This means that there is no need to record the capital gains made on such investments if the total savings and investments are in the form of an individual savings account.
  • Another benefit is the advantage of having a capital gains tax free investment, as any profits made exceeding the annual capital gains tax allowance (£11,700), are subject to 10% or 20% tax dependent on the tax band the investment is categorised under. With ISAs, regardless whether the profit exceeds the capital gains tax allowance, the investor is not obligated to pay a CGT. With this said, there is also no income tax on Individual Savings Account Investments
MARKET OVERVIEW
  • From 2017 to 2018, the amount investors were able to invest in an ISA increased by approximately a third from 15,240 in the previous tax year to £20,000.
  • According to Hargreaves Lansdown, the number of investors that save on a regular basis into individual savings accounts increased by 40% between January 2016 and November 2017 to a total of 74,010.
  • According to Bestinvest, the total number of investors that save using direct debits on a monthly basis has also increased this year by 19% in comparison to the previous tax year.
BENEFITS
  • ISAs are a tax free investment as any returns made on an investors ISA does not need to be recorded in their tax returns. This means that there is no need to record the capital gains made on such investments if the total savings and investments are in the form of an individual savings account.
  • Another benefit is the advantage of having a capital gains tax free investment, as any profits made exceeding the annual capital gains tax allowance (£11,700), are subject to 10% or 20% tax dependent on the tax band the investment is categorised under. With ISAs, regardless whether the profit exceeds the capital gains tax allowance, the investor is not obligated to pay a CGT. With this said, there is also no income tax on Individual Savings Account Investments

SELF-CERTIFY


HIGH NET WORTH INDIVIDUALS


High Net Worth Individuals are those who have a salary of more than £100,000 per annum or savings of over £250,000. 

SOPHISTICATED INVESTOR


Sophisticated investors are individuals who have experience in similar financial products or alternative investments.

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