New Tax Year Means New Tax-Free Allowance - April 2007

As the new tax year begins so does your allowance for tax-free savings and investments. So make the most of the government's tax-free returns and start your savings and investment plan today.

An ISA or Individual Savings Account is a tax efficient way of saving and investing your money, while allowing you to still earn a significant return. There is a limit to how much you can save within the tax year so it is important that you begin contributing now to get the maximum benefit for this tax year.

ISA Limits
You can invest up to £7,000 in each tax year, which runs from 6th April to 5th April. This investment can be made up of a mixture of cash, shares and funds. However you can only invest up to £3,000 in a cash ISA but you can invest up to £7,000 in shares or funds.

Mini ISA or Maxi ISA?
A mini ISA allows you to invest up to £3,000 for your cash allowance and up to £4,000 in shares. So you could have two mini ISA accounts in one tax year. On the other hand if you decide to invest in a Maxi ISA you can only have one within a tax year and your entire investment will be with one provider. Although with a Maxi ISA you can invest up to £3,000 in cash but up to £7,000 in shares or funds.

A cash ISA is the less risky investment option as it basically allows you to save up to £3,000 with the guarantee of returns at the stated interest rate. However if you decide to invest in the shares or funds component of an ISA, your returns can rise or fall depending on the performance of the companies your money is invested in. This is where expert financial advice becomes crucial.

Though an ISA can provide you with the opportunity to begin investing in shares without risking too much capital as you can also invest in the cash option, which brings no risk to your money.

Other advantages of the ISA investment include the fact that you don't have to pay income tax or capital gains tax on any growth you receive on your ISA investment. What's more, ISAs do not have to be recorded on your tax returns.

It is important that you seek advice if you are unsure of the best option for you. Also an independent financial adviser will be able to recommend the best performing accounts from the hundreds out there. At Principle First our investment advisers are waiting to advise you on the best home for your money. For your free investment consultation enquire online at www.principlefirst.co.uk, speak to us on 02871 273030.


Would you like to find out more about the best ISAs available? Get your free investment consultation today. Call us on 02871 273030 to discuss.

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