Use it or lose it - The ISA deadline is approaching
Invest by midnight on Saturday 5th April 2025 for the 2024/25 tax year
Invest through an Individual Savings Account (ISA) and you don’t need to declare any income or capital gains on it to the tax man.
The current annual ISA allowance is £20,000 (2024/25 tax year) and this is a ‘use it or lose it’ opportunity that you cannot carry forward to the next tax year. Invest by close of business on 5th April or miss out on this tax-year’s valuable allowance.
What is an ISA?
Simply put, an ISA is a tax-efficient way to save and invest.
There are four types of ISA:
- Cash ISA
- Stocks and shares ISA*
- Lifetime ISA
- Innovative Finance ISA
*A Stocks and Shares ISA enables you to invest your whole ISA allowance in Aberdeen Investment Trusts.
You do not pay tax on:
- interest on cash in an ISA
- income or capital gains from investments in an ISA
You do not need to include ISAs on your annual tax return, if you complete one.
Find out more about investing in ISAs here.
Putting money into an ISA
£20,000
Every tax year you can save up to £20,000 in one ISA or split the allowance across multiple ISAs. The tax year runs from 6 April to 5 April. For example, you could save £14,000 in a stocks and shares ISA, £4,000 in a Lifetime ISA and £2,000 in a cash ISA in any one tax year.
You can only pay into one Lifetime ISA in a tax year. The maximum you can pay in is £4,000 (and this forms part of your overall £20,000 allowance).
Act now
For many UK individual investors protecting your investments in a tax-efficient shelter makes a lot of sense. If you haven’t already used your ISA allowance this tax year, it’s a case of now or never. Don’t miss out!
Remember of course that tax rules can change, and the tax benefits described above may depend on your personal circumstances.