It’s Tuesday!
Let’s talk Tax.
Read this week’s short Tax snippet for doctors & dentists, to help you save money and get more organised with your tax affairs. It’s just to give you a flavour – in fact, you can read it whilst you drink your morning coffee!
Your 2016/17 ISA Allowance
Everyone over the age of 18 is entitled to save into an ISA, as a means for tax-free investment.
ISA interest is free of income tax and also Capital Gains tax, and they can be utilised in addition to tax-free savings within the 0% savings-rate band.
It is therefore tax efficient to utilise your ISA allowance each year, as the interest earned on savings held in other types of accounts are typically subject to tax.
The ISA limit for 16/17 is £15,240.
Read more:
What else on ISA’s?
Due to new, more flexible rules, the investment can be held totally in Cash, in Stocks & Shares, or a combination of the two.
It is also now possible to transfer between Cash and Stocks & Shares ISA’s throughout the tax year, making ISA investment much more customer-friendly.
If you need to access money held in your ISA part way through the year, you can simply withdraw it, and, if you are able later in the year, re-invest it.
As long as at the end of the tax year, your net annual investment is below the threshold of £15,240, then your interest will be tax-free.
A financial adviser can help you to keep track of your ISA and also help you in selecting which ISA is best for you.
Doctors and dentists regularly use ISA’s as a means of saving their excess income, tax-efficiently and now with added flexibility there is little to lose.