Tax Efficient Savings

There are a number of savings and investment options that have an advantageous tax treatment as laid down by HM Revenue & Customs. Your Almary Green financial adviser will ensure that you are taking advantage of all the opportunities available. This may involve looking at some or all of the following options:

  • Individual Savings Accounts (ISAs) are usually the first port of call for tax-efficient savings. Interest or growth on savings in ISAs remains tax-free while they are held within the ISA package. You can hold your ISA savings in either cash ISA arrangements or in stocks and shares – or a mixture of both. There’s a limit on the amount you can put into an ISA each year: the limit for the 2017-18 tax year is £20,000. Those who have existing ISA savings may wish to review the accounts they hold to see if better rates can be obtained. It is critical if you change provider that this is done using an ISA Transfer to ensure that the preferential tax treatment is maintained.
  • Help to Buy and Lifetime ISAs have been introduced to provide tax-efficiency for those who want to build up their savings for two significant lifetime events: buying your first home and retirement. Subject to certain rules, the Government will provide a bonus to the ISA saver when the money saved is used for these purposes. Talk to your Almary Green adviser about how this could benefit you.
  • There are other specialist ISAs available such as the AIM ISA but these are only suitable in certain circumstances. Your Almary Green adviser will explore these options if they are suitable for you.
  • Junior ISAs (JISAs) can be set up for children under the age of 18 – see our Family Savings page.
  • Savings Accounts – such as those with Banks and Building Societies – generating interest up to the Personal Savings Allowance can also be tax-efficient. The Personal Savings Allowance was introduced in April 2015 and gives basic rate taxpayers up to £1,000 of savings income free of tax. Higher rate taxpayers get an allowance of £500.00 but there is no allowance granted to additional rate taxpayers.
  • Investments and savings held with National Savings and Investments (NS&I) are also tax-efficient. These include index-linked certificates, fixed interest certificates and Premium Bonds.

There are also a number of specialist tax-efficient investment options that may carry a higher level of risk and are generally most suited to those with specific circumstances, knowledge and experience. They involve investing in companies looking to stimulate growth. In general they offer some income tax and Capital Gains Tax savings and involve qualifying conditions such as minimum terms and maximum investment levels. However, we recommend that you take advice if you are considering this sophisticated type of investment. They include:

  • Venture Capital Trusts (VCT)
  • Enterprise Investment Schemes (EIS)
  • Seed Enterprise Investment Scheme (SEIS)

Managing the tax-efficiency of your investments is an important part of your financial plan. To ensure that you are taking advantage of the available benefits, contact us to arrange an investment review meeting.

The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. The tax treatment of investments depends on individual circumstances and is subject to change.

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