UK ISA - Individual Savings Allowance

6th of April represents the dawn of the 2017-18 financial year for the UK Government. This brings about changes in the tax rules and other changes that impact individuals. We will be looking particularly at the changes in the ISA (Individual Savings Allowance) rules.

The limit on the amount you can now save into a tax-friendly ISA (the ISA allowance) has risen from £15,240 in 2016-17 to £20,000 in 2017-18. ISAs allow investors to put their money into a range of savings or investment vehicles without paying tax on the interest, dividends or capital gains. An allowance can be used in one kind of Isa alone or split between different types, such as a cash, stocks and shares or Lifetime ISA.

Lifetime ISA launched
The new Lifetime ISA (individual savings account) is designed to help people to save for a house or for retirement, with the attraction of a 25 per cent top-up from the government on savings. Anyone aged between 18 and 39 can save up to £4,000 a year to gain a bonus of up to £1,000 a year. The money can be used either to buy a first home — worth up to £450,000 — or be withdrawn tax-free after the age of 60. Those with a Help to Buy ISA will be able to roll it into a Lifetime ISA or continue saving separately.

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