ISAs: the investor's no-brainer
It's not often the tax man gives us money – or at least doesn't take it – and one of the most generous allowances we receive is that of the ISA. Here are four reasons why we think making the most of this tax-wrapper is a no-brainer:
1. Keep all your gains
An ISA wrapper protects your investments from all income, dividend and capital gains liabilities – not just some of them. Interest and dividend allowances for investments held outside of an ISA both have limits (the latter is also being slashed next tax-year) and you could be liable for a tax bill of 7.5% to 38.1%.
2. Complete flexibility
You can move your money from cash to investments and back again at any time – all at no extra charge through the Chelsea FundStore. And you can access your money whenever you need it.
3. Ease of administration
This one is simple: you don't have to declare your ISAs on a tax return, so less admin.
4. Inheritable ISA allowance
You can now pass on your ISA portfolio to your husband or wife. Spouses can benefit from an additional one-off ISA allowance, equal to the total amount the deceased held within their ISA at the date of death.
It only takes a few minutes to open an ISA with Chelsea. Just make sure you have your National Insurance Number and bank details to hand – and remember, if you don’t know what to invest in, you can pay cash into your ISA and choose investments later.