Welcome to day 3 of 7 days of our New Year money tips – today we consider how you can make the most of your ISA allowance.
Start your investing earlyUse your ISA allowance earlier in the tax year, in April if possible, and you will earn extra cash from up to 12 months’ tax-free growth and income. Bear in mind that from April 6th the way in which company dividend income will be taxed will change. Currently all dividends are paid with a 10% tax credit. For every £1,000 of dividend income received it is assumed that £111 in tax has already been paid (the total dividend is therefore £1,111). From April 2016 the first £5000 of dividend income will be tax free but beyond this amount the tax liability for taxpayers will change. Basic rate tax payers pay 7.5%, higher rate tax payers 32.5% and additional rate tax payers will pay 38.1%.
Disclaimer: This article not constitute financial or other professional advice. You should consult a professional adviser if you require financial advice.
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