Tax Free Savings

In the new tax year it is good to look at the tax free savings schemes that are available:

Lifetime ISA:  The benefit is that you can put in up to £400 a month and the Government tops this up by 25% to £500.  You need to be under 40, you can use the money for your first house or when you are 60.  If you are over 40 could you save for your children or grandchildren through this wrapper?

ISA:  There is a new £20,000 per person per year limit.  ISAs shelter your savings from higher rate tax, dividend tax and capital gains tax.

Pensions:  These are more complicated but you have a £40,000 per year limit per person (overall fund is taxed if it goes over £1 million).  A great way to save money if you are a higher rate tax payer, particularly as you approach your mid 50s and you can take the money out!  There are also inheritance tax benefits.

 

Leave a comment