As a child of the sixties, I grew up watching Star Trek. Obviously I was nicknamed Scotty at school, so I wish I had a pound for every time someone has said to me “Beam me up Scotty”. However my favourite character was Spock. He was a perfectly rational creature and his well-worn phrase, ‘That, is illogical captain’, has become one of the most recognised lines of script in television history.
Today www.unbiased.co.uk have launched Tax Action 2012. It is their annual report which identifies how much money we are wasting as a nation by not being tax efficient. This year a staggering £12.6 billion is set to be gifted to the taxman through inefficient tax planning. I bet First Officer Spock wouldn’t pay too much tax; he would invest in ISAs.
ISAs are a no brainer. Each year you can invest some of your capital where the returns are tax-free*, all other comparable investments are taxable. This takes no thinking about. I’m not going to bore you with the detailed ISA rules here, other than tell you the maximum you can invest is £10,680. In the next tax year that maximum will rise to £11,280. If there were no upper limit to the amount you can stuff into an ISA, then we would probably not need to invest elsewhere in most client situations.
We always recommend clients try to use their ISA allowance each year. Could you please complete the form below to bring us up to date with your plans.
*Since 1999 dividends from UK shares have suffered a 10% tax charge which cannot be reclaimed by the ISA provider. (You can thank Gordon Brown for that one)