ISA accounts. A genuine tax break !.
What if I told you that you can earn interest and pay no tax on it ?
Would you believe it is possible ?
It is !.
WHAT IS AN ISA ?
– ISA’s are “individual savings accounts”. When you invest up to £5,340 pounds in them, the interest earned is tax free !. (you normally pay about 20% tax on interest earned).
– you can only open one per year
– the amount you can invest (your allownace) increases each year
– your can also invest the same amount in shares.
CAN I WITHDRAW FUNDS ?
– you can withdraw, but once you do, you cannot re-deposit these funds in the same year
– if you invest say £2,000 and withdraw £1,000, you can only deposit another £3,340. (that’s £5,340 less £2,000)
A NOTE OF CAUTION
I notice that a quick search of ISA accounts on the internet show that account conditions vary.
You can get rates up to 3.25%.
Some charge you a withdrawal fee, some don’t.
As with all things finance, my advice is to SHOP AROUND. This is one time that doing shopping will save you money !.
WHY IS THE GOVERNMENT GIVING ME A TAX BREAK ?.
The UK government is offering a genuine incentive to save.
In others words, this is “a real deal”.
As at the time of this post, there is only 52 days to go till the end of the financial year (5th April 2012). So you will need to act soon.
Please contact me if you need any help.