Navigate ISAs

Individual savings accounts (ISAs) enable people to people to save a set amount of money without any income and capital gains tax implications. 

There are a range of cash ISAs on the market, but stocks and shares ISAs - also known as equity ISAs - are a tax-efficient way of investing in a range of stock market related assets. 

An equity or stocks and shares ISA offers the possibility of higher returns than a cash ISA, but a person should only invest if they are prepared to take the risk that their investments could go down, as well as up, in value. 

These investment ISAs are more of a long-term commitment, which makes them suitable for people who are saving for an event a number of years away, such as retirement or university fees for a child or grandchild.

The team at Navigate Wealth is experienced in identifying the best investment options that meet individuals’ specific financial goals. 

To find out more about individual savings accounts, or to arrange a free consultation, you can contact the Navigate Wealth team on 0345 340 9690 or use our submission form.

What can I invest in? 

Unlike some other investment options, with a stocks and shares ISA, you can choose how your money is invested in the following: 

• Shares - investing in individual companies with your share increasing or decreasing dependent on how well the company performs
• Corporate and government bonds (gilts) - lending money to a company of government and receiving interest payments
• Trusts - including unit trusts and investment trusts
• Funds - these can include bonds, shares or a combination of the two - they can sometimes also include cash

Tax benefits of ISAs

There is a £20,000 limit that any person can pay into an ISA in the current tax year, but one of the main benefits of a stocks and shares ISAs is that you do not have to pay income tax or capital gains tax on the growth of your investment - as long as you keep the investments within an ISA. 

The tax benefits also depend on whether the person investing is a basic, higher or additional-rate taxpayer. Placing investments inside an ISA wrapper provides three tax advantages: 

Capital gains

You don’t have to pay any capital gains tax on profits made from share price increases. If you invest outside of an ISA, any profits made above the annual capital gains tax allowance (which is £11,700 for 2018/19) would be subject to tax at at 18% for basic-rate taxpayers and 28% for higher and additional-rate taxpayers. 

Interest

If you make interest-bearing investments with your stocks and shares ISA, such as corporate or government bonds, interest is paid tax-free, making you a 20%, 40% or 45% saving dependent on whether you are a basic, higher or additional-rate taxpayer.

Dividends

You don’t pay tax on dividends on money that is held within an ISA. Outside this investment method, basic-rate taxpayers get a £5,000 dividend income allowance while higher and additional-rate taxpayers would pay 25% and 30.56% tax respectively on any amount above the allowance. 

Contact us

Navigate Wealth is here to help you decide what equity ISA will help you achieve your financial goals by providing thorough, easy-to-understand insight into the range of options available to you. 

To find out more about individual savings accounts, or to arrange a free consultation, you can contact the Navigate Wealth team on 0345 340 9690 or use our submission form.