Making the most out of ISAs and pensions for 2012/2013

Now that your tax return for 2011/2012 has been submitted and any tax owed paid, it is a good time to turn your attention to the current tax year and focus on the tax efficient investments that can be made before 5 April 2013.

Individuals who are aged 18 or over (16 or over in the case of cash ISAs) who are resident and ordinarily resident in the UK are able to subscribe up to £11,280 for 2012/13 in ISAs. In 2012/13, up to £5,640 may be invested in cash and the balance up to the overall limit of £11,280 may be invested in stocks and shares. It is important to note that the ISA investment limit cannot be carried over to the next tax year if it is not used.

It is also worth remembering that Junior ISAs are now available to children born after 3 Jan 2011 or before born before September 2002. The money saved in a Junior ISA can’t be taken out until the child is 18. If eligible your child can have both a Junior cash ISA and a Junior stocks and shares ISA. If they do, the total amount that can be paid into the two accounts combined in each tax year is £3,600.

Tax relief for pension contributions is given for the tax year in which the contribution to a registered pension scheme is paid. The rules on pensions have changed relatively recently and so pension contributions cannot be carried back to provide tax relief in an earlier tax year.

If you would like any further information please feel free to contact the team on 01733 371180.

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