Time is running out to make one of the most of your tax-free cost savings due to the fact that the existing tax year ends when the clock strikes 12 tonight (Wednesday April 5).
If you miss the deadline at midnight then you will lose the rest of your optimum ISA allowance for the 2016/2017 tax year. The present limitation is ₤ 15,240.
But the bright side is that the ISA limit is being increased to ₤ 20,000 for the brand-new tax year which begins tomorrow (Thursday April 6). Danny Cox, chartered financial planner at Hargreaves Lansdown, stated:”If you don’t use your complete allowance by midnight on the 5th April the allowance is gone and any additional savings or investments you make into ISA will enter into the brand-new tax year, beginning Sixth April 2017.
“Some individuals leave it till the very eleventh hour, doing the ISA at 10 minutes to midnight on the 5th. I suggest you leave a little more time since when the clock strikes 12 you are far too late!”
If you miss the ISA deadline tonight, Mr Cox advises starting to utilize up your new ISA allowance as early as possible in the brand-new tax year.
He stated: “The earlier you use your ISA allowance in the tax year the much better. Your financial investments are protected from tax immediately, and have longer to grow.
“Over the long term this can have a big impact on returns. Early riser investors acquire up to a whole year of dividends and possible development in the stock market ahead of those who leave it until the eleventh hour.”
Savers can put their all their yearly allowance in a cash ISA or a stocks or shares ISA or split their allowance between different types of ISAs.
The ISA limit covers Lifetime ISAs for those under 40 along with Aid to Purchase ISAs and the brand-new Ingenious Financing ISAs that include peer-to-peer loans.Cash ISAs are easy savings accounts which do not tax interest and offer a low-risk return on money. The stock exchange uses higher potential rewards than a
money ISA but it comes with more danger. There is no tax on income and capital gains from financial investments. Daily Express:: Personal Finance Feed