Pay less tax on savings and investments
Use your tax-free ISA allowance. From 6 April 2016 the annual limit will stay at £15,240. This can all be put in a cash ISA, all in a stocks and shares ISA or split between both cash and stocks and shares.
- No CGT on shares held in an ISA
There is no capital gains tax to pay when you sell shares or units held in an ISA.
Make use of Junior ISA's or Children’s Bonus Bonds to avoid being taxed on gifts you make to your own children.
Transfer savings and investments to your husband, wife or civil partner if they pay a lower rate of tax than you currently pay.
From 6 April 2016, the first £5,000 you receive in dividends from investments is tax free. Basic rate taxpayers will pay 7.5% tax on dividends they receive above the threshold however. Higher rate taxpayers pay 32.5% and additional rate taxpayers 38.1%.
- Personal Savings Allowance
From 6 April 2016, the first £1,000 of interest you receive from savings is tax free, if you are a basic rate taxpayer. If you are a higher-rate taxpayer, the threshold is £500. It is only if your savings income exceeds the allowance that any tax is due on it. This will no longer be deducted at source, if tax is due you can pay it via self-assessment or have it deducted via PAYE through an adjustment in your tax code.
Last updated:
May 2016
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Updated By:
MGT Research Team
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