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Did you know that if you are a basic rate tax payer, when you receive £1 in interest from your savings, the tax man is immediately entitled to 20p of it? In fact, that 20p is usually taken by the bank and given to the Government before your even get your statement. And if you are a higher rate tax payer the tax man could take up to 50p in each £1 that you earn from money that you have carefully put away year after year. However under current Government regulations, any income or capital growth enjoyed on savings within an ISA wrapper are completely shielded from the tax man so that you can enjoy 100% of the benefits you are entitled to. But with only half of your annual allowance allowed to sit in cash, to take full advantage of all the benefits that this scheme allows a stocks and shares ISA is becoming an essential investment for most. In tax year 2012/13, the Government is allowing each UK resident to invest up to £11,280 within the ISA wrapper with all income and capital enjoyed completely free of tax. However as a maximum of £5,640 can be held in cash, the rest must be invested in more equity based opportunities to gain the full benefits of such an advantageous tax efficient savings vehicle. But do not fear, if you have no experience at all of the stock market and just want to maximise your level of investment under the ISA system, you do not need to start pondering over the FT for hours each day before shouting ‘buy buy’ and ‘sell sell’ down the telephone - there are many ISA investment funds available to you simply and easily which have been set up with investors like you in mind. ISA investment funds have been created so that you can choose a level of risk that suits you, and a level of fees that you are willing to pay, and then match this to a diverse range of stocks and shares which have been carefully pre-selected by experienced fund managers that are rated on the performance of the stocks they have chosen in the past. As you invest in such funds, your money is combined with that of other like minded people to create a portfolio that managed on your behalf so that you can sit back safe in the knowledge that you have someone looking out for your investments and that you have also maximised on one of the most tax efficient and moral forms of saving that are available today. But it is not only investment funds that can be placed in a stocks and shares ISA. You can also include unit trusts, open ended investment companies, exchange traded funds or individual shares and bonds. If you are part of an HMRC approved SAYE share option scheme or participate in a share incentive plan, then this can also be incorporated, all within the same ISA system. The choice is yours and the benefits are considerable, so the only question that remains is why haven't you opened yours yet?
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