Six tips for your last minute ISA 2018/19

ISAs are one of the simplest ways to invest and save tax. Here are some tips for investors looking to use their allowance before April 5th.

This content is more than 6 months old now, please visit the news area of this site for more recent content

  1. Rob Morgan

1. Use your ISA allowance as far as you can

You can currently invest up to £20,000 a year with an ISA, often the first port of call for those looking to save tax. They are simple, flexible and tax-efficient: Gains realised on the sale of stocks and shares within an ISA are free from tax, and so is any income from dividends or interest.

Even if keeping your money outside the clutches of the tax man doesn’t seem relevant now, it might in the future. It could be worth planning ahead for when your wealth grows.

The ISA allowance is available to any UK resident over 18 and can be split between different types – the most common being Cash and Stocks & Shares. Charles Stanley Direct offers Stocks & Shares ISAs.

A Stocks & Shares ISA could deliver a higher return than Cash ISAs over the longer term, but remember that there is a risk the value of your investments could fall – especially in the short term.

Find out more about last minute ISA options

2. Don’t panic into an investment decision

If you'’re unsure where to invest in your Stocks & Shares ISA, you can always secure this year'’s allowance with cash now and decide later. There is no charge for holding cash but please note that no interest is paid currently so this should be only be considered as a temporary measure.

3. Consider your spouse’s allowance too

If you are married or in a civil partnership it’s possible to organise your affairs efficiently so that tax free allowances aren’t lost.

4. Don’t forget the kids

Junior ISAs are a popular way for family and friends to build up tax-efficient savings and investments for a child. The tax benefits are the same as an adult ISA – no capital gains tax, and no further tax to pay on income.

Withdrawals are possible from the age of 18 when it automatically converts to an adult ISA, meaning the pot can be useful to help with the cost of university or a deposit for a house. This tax year’s Junior ISA allowance is £4,260 per child.

Find out more about Junior ISAs

5. Pensions are also an option

Pensions are often a highly effective means of investing for retirement owing to the tax relief available on payments into them.

Currently, anyone under 75 with relevant UK earnings can receive tax relief when they make a contribution within the annual allowance to a personal pension such as the Charles Stanley Direct SIPP. 20% is added by HMRC and any further higher or additional rate income tax relief can be reclaimed – a potentially a simple way of reducing your income tax bill for the year.

Find out more about pension tax relief

6. Don’t leave everything until the last minute

You can make payments into your Charles Stanley Direct ISA online using your debit card until midnight on Friday, 5 April. This is via the "“Pay Money In"” link under the "“Manage my money"” section of the site on your My Accounts page. We recommend that you don’t leave subscriptions until the last minute in case you encounter a problem making a payment, though.

Need help?

Please visit our FAQs or contact our Helpdesk at [email protected], on 0131 550 1234 or via Secure Message from your dashboard. They will be available until midnight on Friday, 5 April.

This website is not personal advice based on your circumstances. Charles Stanley Direct is not a tax adviser.  Information contained in this article is based on our understanding of current HMRC legislation.  Tax reliefs are those currently applying and the levels and bases of taxation can change.  Tax treatment depends on the individual circumstances of each person or entity and may be subject to change in the future.  If you are in any doubt, you should seek professional tax advice.

More from author

  1. Rob Morgan

    Fundsmith Equity – fund update

    Direct Comment - 1st Apr 2019 16:41pm

    Our latest view of this popular global equity fund.

  2. Rob Morgan

    How investment trusts can boost your portfolio

    Direct Comment - 1st Apr 2019 16:41pm

    Investment trusts can sometimes offer significant advantages over funds and bring som...

  3. Rob Morgan

    Foundation Fundlist review – US equity funds

    Direct Comment - 1st Apr 2019 16:41pm

    Last year, we overhauled the US equity funds on our list of preferred funds for new i...

Most read articles

  1. Six tips for your last minute ISA 2018/19

    Six charts that explain the current stock market environment

    Direct Comment - 1st Apr 2019 16:41pm

    Having just passed the halfway point of the year what can we expect from markets now?

  2. Six tips for your last minute ISA 2018/19

    A mining sector correction may be coming

    Direct Comment - 1st Apr 2019 16:41pm

    Miners make up 10% of the FTSE 100 and gains in the sector this year have significant...

  3. Six tips for your last minute ISA 2018/19

    Eight retirement planning mistakes

    Direct Comment - 1st Apr 2019 16:41pm

    There have never been more options in terms of retirement planning, but arguably ther...

Investment involves risk. You may get back less than invested.