By understanding which products are most tax efficient, you can make the most of your savings and investments, and minimise how much tax you pay.
Almost all of the potential growth in ISAs is tax free. The annual ISA allowance for 2019/2020 is £20,000. This can be split between Cash ISAs and stocks & shares ISAs as you want.
Investing in a pension gives you several tax advantages:
- You get tax relief on the money you pay into your pension.
- Your pension grows virtually tax free.
- You can take part of your pension pot as a tax-free lump sum.
You might not be able to mitigate inheritance tax (the tax to be paid on your estate when you die) completely.
As with any investment, the value can go down as well as up, and may be worth less than you paid in.
Laws and tax rules may change in the future. The information here is based on our understanding in April 2019 and your personal circumstances also have an impact on the taxes you pay.
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