THERE ARE only a few weeks left in which to take full advantage of the tax reliefs and allowances for this tax year, so now’s the time to review your finances to ensure you don’t miss the opportunities.
Isas
Individual Savings Accounts (Isas) were introduced by the then Chancellor Gordon Brown back in 1999, when you could invest up to £7000 a year tax-free, £3000 of which could be in cash. That annual allowance now stands at £20,000 for UK residents over 16, all of which can be held in cash if you so choose.
In recent years the popularity of cash Isas in particular has been affected by circumstances. Historically low interest rates have meant that many cash Isas pay less than the rate of inflation, and savings rates on non-Isa savings accounts often pay better interest, even after the deduction of tax.
Still more significant is the fact that there is now a savings allowance which means everyone can earn up to £1000 of interest a year tax-free (£500 if you are a higher or additional rate taxpayer).
