The 5 April deadline for investing your money into an Individual Savings Account (ISA) is again looming. According to various surveys doing the rounds, many people have decided not to invest in an ISA. But, how many people know why they have decided not to invest? Very few, we believe.
Our View
Despite the 10% reclaimable tax credit on dividends being abolished with effect from April, if you are a higher rate taxpayer, you will be £25 richer for every £100 of net dividends you receive in your ISA. This is opposed to receiving dividends outside an ISA. There is also a benefit for anyone that would use his or her Capital Gains Tax allowance each year. It doesn't matter if you pay tax at the lower, basic or higher rate. ISAs are not subject to Capital Gains Tax. This means that you could use your annual allowance elsewhere, saving your even more money. Check on the benefits for investing in an ISA.