It’s that time of the year again!

It’s that time of the year again!

The end of the financial year is fast approaching, which means there is only a limited time to use your annual ISA allowance (currently £11,520 for a stocks and shares ISA). Don’t worry, even if you have already fully subscribed for a cash ISA (£5,760), you can still use the rest of your annual allowance to invest in a stocks and shares ISA.

Unfortunately, if you don’t use all of your allowance, you can’t roll it over into the next tax year – so it’s use it or lose it!

To download our current stocks and shares ISA subscription form, please CLICK HERE.

Get a better return on your savings

Cash savings rates aren’t that compelling at the moment. Whilst there is speculation that the base interest rate will start to increase next year, it’s ascent isn’t going to be steep. The Bank of England is comfortable with current market expectations, which assume the base rate to be at 2% by 2017 (see p49 in the bank’s latest Inflation Report).

In our recent Spring Investment Review, we highlighted several ISA-eligible investment funds that offered a significantly more attractive income return than cash accounts. CLICK HERE to read more.

Some benefits of a stocks and shares ISA

The main advantage for investors is that any profit made above the annual Capital Gains Tax allowance (£10,900) is FREE from tax; either 18% for basic rate taxpayers or 28% for higher/additional rate taxpayers. Therefore, there are potentially significant savings to be made in the long run.

For higher and additional rate taxpayers, there is a further income tax benefit. All investment income (ex. bonds) is taxed at source (currently at 10%), therefore, as a basic rate taxpayer, no further income tax is due. However, for higher and additional rate taxpayers, outside an ISA wrapper, a further 22.5% and 32.5% respectively is due. This can be avoided within an ISA wrapper. Therefore, for income seeking investors there are significant potential benefits.

There is also no income tax on fixed interest assets for all taxpayers.

Transferability of previous Cash ISAs

If you have used your full cash ISA allowance over the years, you may have amassed many ISA subscriptions, but are now earning paltry rates. However, for those who want to increase their returns and take on some additional risk, savers can transfer their existing cash savings into a stocks and shares ISA, regardless of the annual allowance. To download our cash ISA transfer form, CLICK HERE.

Don’t forget you can also Bed & ISA

If you hold existing stock and share assets, you are able to sell and repurchase (up to the annual allowance and less costs and the bid-offer spread) within a stocks and shares ISA (only paying the contract charge and stamp duty on eligible stocks on the repurchase). However, please note that the sale may be subject to Capital Gains Tax.

For more information on opening a stocks and shares ISA with Cave & Sons, please contact a member of our team on 01604 621421 or via email at Please refer to our latest Rate Card for information on our ISA charges and other applicable charges.