With the new tax year a few days away now is the perfect time for you to review data of your personal tax and businesses to ensure that you have utilised all available tax allowances and reliefs in the ongoing tax year. Doing so will also help you in planning for the tax year ahead. 

Our tax experts here at IBISS & CO have notified all allowances and tax reliefs that can slash your tax bill considerably, and that too in a legal way. So, stay with and save your hard-earned money. 

ISAs – Individual Saving Accounts

ISAs are the most tax-efficient way of saving your income. When completing a tax return, you are not required to disclose any ISA income, interest, or capital gainst on it. 

The 4 different types of ISAs are: 

  1. ISA: A UK resident can invest an annual allowance of up to £20,000 in ISA annually. 
  1. Junior ISA: A parent, grandparent, or guardian sets a Junior ISA as a long-term saving account for their child’s (ren) future. It can be held both in stocks and shares. The annual threshold for the Junior ISA is £9,000 and is available to those who are not eligible for Child Trust Fund. You can also transfer an existing Child Trust Fund into Junior ISA. 
  1. Help-To-Buy ISA: A Help-To-Buy ISA allows you to save as much as £200 per month whereas the state adds a tax-free 25{f5c46dbfd7a370437117a81398f3ac99c38e148024d17c03e20eb6cfc854a7af} bonus on whatever you have saved. However, the maximum threshold of tax-free bonuses from the state is £3000. The cherry on the top? Interest that you earn on Help-To-Buy ISA is tax-free. 

There’s a twist here. You only earn a tax-free bonus from the state when you use this ISA as a deposit for your 1st home. A bit complex? Reach out to our tax advisers for a 15-Minute Free Call. 

  1. Lifetime ISA: Lifetime ISA is used for 2 purposes: buying your 1st house or saving it for a later part of life. To be eligible for opening a Lifetime ISA, one should be either 18-year-old or under 40 years. 

In Lifetime ISA, you can deposit as much as £4,000 annually until you are 50-year-old. The state is going to add a 25{f5c46dbfd7a370437117a81398f3ac99c38e148024d17c03e20eb6cfc854a7af} bonus annually with a maximum threshold of £1,000 annually. The Lifetime ISA limit of £4,000 counts towards your annual ISA limit. This is £20,000 for the 2020 to 2021 tax year.

To learn more about Year-End Tax Planning & ISAs, reach out to our experts for a 15-Minute Free Call.

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