Published On: Sun, Mar 8th, 2020

ISA contributions: Allowances reset at the end of the tax year – this is the date to note | Personal Finance | Finance

ISAs are a big part of many savers’ financial plans. ISAs allow people to put more into them which will be completely free of any tax charges. Any returns from an ISA, be it interest or investment gains, will not have any taxes levied. This includes both income tax and capital gains tax.

The government detail that it is possible to open ISAs with:

  • Banks
  • Building societies
  • Credit unions
  • Friendly societies
  • Stock brokers
  • Peer-to-peer lending services
  • Crowdfunding companies
  • Other financial institutions

Each provider will have specific rules and procedures unique to them however so applicants will need to contact the providers directly for more information.

If the government decides to lower the allowance for the coming year, savers have a reduced tax incentive. While there is no obligation to fill an ISA to its absolute limit, it is generally advisable to put as much money in them as possible.

ISAs have other benefits on top of their tax perks. It is possible to take money out of ISAs without losing any of the tax allowances, meaning that consumers can move their money between different ISA accounts without fear.

Some people may wish to move their ISAs to take advantage of better interest rate offers from separate providers. This will not be an issue but caution should be taken if someone wishes to do this with a deadline looming.

The government detail that it can take up to 15 working days to process transfers between cash ISAs. In some cases it could be even longer, with non-cash ISAs taking up to 30 calendar days.

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