Our 5-minute read – Tax Tips – for UK doctors and dentists will help you save tax, get organised with your tax affairs and make sure you meet important deadlines with ease.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice.
Another tax year has begun which means you have another opportunity to save thousands of pounds tax free.
ISA accounts are a great, tax-efficient way to hold all your investments – from bonds, equities, and multi-asset funds to property and cash.
The ISA and LISA allowances for the 2018/19 tax year remain unchanged at £20,000 and £4,000, respectively, while the Junior ISA allowance has increased to £4,260. As usual, you can spread your contributions across all of your ISA accounts as long as you stay under the £20,000 overall limit.
Many people will wait until the end of the tax year and make a mad dash to top up their ISAs.
But the better option is to start making contributions now, at the beginning of the tax year, so you can maximise the amount of time your money is sheltered from tax.
Being able to save your money tax-free isn’t the only benefit to ISAs. When you deposit money into them, you won’t have any personal Income Tax due on the interest you receive from investments.
Which ISA is most suited to savvy investors?
Stocks & Shares ISAs are a type of ISA often favoured by savvy investors and those in retirement, as bond funds generate interest consistently which can act as income. There’s also less risk compared to equities and there’s no conflict with payments you will receive from your pension.
There’s also an element of flexibility to ISAs as you can withdraw your money, tax free, whenever you need it, which is a great option for retirees.
After the age of 55, you can usually withdraw as much as you want – a contrast to pension accounts, which are subject to a withdrawal limit of 25% of your balance, and taxed.
Yet another benefit is that you don’t have to declare any investments held in ISAs on your tax return. For self-employed doctors and dentists that need to file at the end of the tax year, this is one way you can simplify the process.
If you’re not taking full advantage of every penny of your available ISA allowances, you could be leaving a lot of money on the table.
Working with our dental and medical financial advisers will ensure you have the best plan of action to save as much money tax free as possible.