let’s look at TAX FREE INVESTMENT..

* cash ISAs

* stocks and shares ISAs

* innovative finance ISAs

* Lifetime ISAs including help to Buy

You can put money into one of each kind of ISA each tax year and you can use them to save cash or invest in stocks and shares. You can even get money back by using these schemes effectively. You can pay your whole allowance of £20,000 into a Stocks and shares ISA, or into a Cash ISA or any combination of these. You may be able to take money out but also top up your ISA later on that tax year.

You pay no Income Tax on the interest or dividends you receive from an ISA and any profits from investments are free of Capital Gains Tax.

Flexible ISAs

ISA providers can offer a flexible facility which will let you withdraw and replace money from your ISA, provided it’s done within the same tax year. You should check with your ISA provider that your ISA has this function. (not available for Junior ISAs or the Help to Buy ISAs).

Help to Buy ISA

A Help to Buy ISA was introduced to help first-time buyers save towards the cost of buying their first home. You can make an initial deposit of £1,000 when you open a Help to Buy ISA and then receive £50 for every £200 saved up to a maximum of £12,000. The tax break is capped at £3,000.

You also earn tax-free interest on your savings as with a standard ISA, these ISAs are limited to one per person rather than one per house so you can’t contribute to a Cash ISA in the same tax year.

Innovative Finance ISA

This will cover loans arranged through peer-to-peer (P2P) platforms. These investments are made in cash, then the provider usually lends it to other individuals or businesses. The returns may be higher than a cash ISA, but the risk, due to the ‘default risk’ of the borrower means that return may end being less than highlighted at the outset.

Lifetime ISA

This product will let you save up to £4,000 per year and get a government bonus of 25% (up to £1,000). It will be available to people between the ages of 18 and 40 and can be used to save for a first home, or for retirement (after you turn 60).

The retirement option is at a later date than pensions, and the amount you are able to invest is much lower.

Junior ISAs

Junior ISAs are a great way to save tax-efficiently for your children.

So, Family and friends can put up to £4,260 into the account on behalf of the child in the 2018-19 tax year. There’s no Income Tax or Capital Gains Tax to pay on the interest or investment gains. Junior ISAs are available to any child under 18 living in the UK who doesn’t qualify for a Child Trust Fund. These can be a cash investment or Stocks and Shares.

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