It’s
that
time
of
the
year
again.
Savers
across
the
country
are
rifling
through
papers
to
ensure
they
declare
their
taxable
income
and,
when
it
comes
to
individual
savings
accounts
(ISAs),
working
out
what
left
they
have
to
maximise
their
allowances
before
the
end
of
the
tax
year
on
5
April.
This
is
understandably
an
intense
experience.
With
a
deadline
approaching,
what
do
financial
advisers
tell
clients
looking
to
get
it
right
under
pressure?
The
first
thing,
says
Jarrod
Ellis,
director
at
financial
advice
firm
Delta
Financial
Management,
is
“do
not
panic.”
“Do
not
panic
because
people
rush
around
and
think
‘I
must
invest
in
this
and
that,'”
he
says.
“If
you
are
short
on
time,
what
I
would
do
is
open
an
instant
access
cash
ISA.
Either
with
[your]
own
bank
or
another
bank
because
that
means
you
have
used
your
allowance
for
this
year.
“After
that
if
you
decide
you
want
to
put
into
a
fixed-rate
deposit
or
want
to
put
it
into
an
equity
ISA,
you
can
transfer
it
in
the
new
tax
year.
But
you
have,
in
effect,
used
your
allowance
up
without
having
to
make
any
life-changing
decisions.”
Ellis
also
sees
a
window
of
opportunity
for
parents
holding
junior
ISAs
for
their
kids,
or
even
savvy
kids
themselves.
Anyone
who
is
16
to
18
can
use
up
their
junior
or
cash
ISA
allowance
before
5
April –
and
before
the
cash
ISA
minimum
age
increases
from
16
to
18
this
year.
“What
was
happening
was:
someone
under
18
could
have
a
junior
stocks
and
shares
ISA
and
put
£9,000
in.
But
they
could
not
have
an
adult
stocks
and
shares
ISA
until
they
were
18.
But
they
had
this
weird
thing
where
cash
ISAs
began
at
16,”
he
explains.
“So
someone
who
is
17
could
put
£9000
into
a
junior
stocks
and
shares
ISA
and
then
put
£20,000
into
a
cash
ISA
as
well.
In
effect
16-17
years
olds
had
a
£29,000
ISA
allowance,
but
they
have
got
rid
of
this
to
make
the
system
simpler.”
Why
The
ISA
is
Tax-Advantageous
Taylor
Beavis,
director
and
financial
adviser
at
Universe
Financial
Advice,
says
many
of
his
clients
in
London
are
into
share
trading
because
of
adverts
plastered
across
the
tube,
which
leads
them
to
miss
out
on
the
benefits
of
ISAs.
“A
client
of
mine
had
built
up
a
substantial
portfolio
but
had
no
idea
what
an
ISA
was;
he
built
it
all
outside
an
ISA
and
what
that
means
is
any
income
that’s
generated –
any
dividends
paid
– are
subject
to
dividend,
income
and
capital
gains
tax.
“Had
he
built
that
in
the
stocks
and
shares
ISA
over
the
years,
where
he
could
hold
the
exact
same
investments,
he
would
then
never
have
had
to
pay
any
money
on
any
growth,
income
or
any
dividends.”
As
a
result,
Beavis
would
tell
a
theoretical
client
with
money
outside
a
stocks
&
shares
ISA
to
sell
some
of
their
pot
to
use
up
their
capital
gains
tax
allowance
this
tax
year.
That
would
mean
the
gain
on
their
investments
would
remain
within
the
allowance,
which
would
spare
them
from
paying
capital
gains
tax.
The
proceeds
could
then
be
moved
into
an
ISA.
Nevertheless,
Beavis
still
highlights
the
importance
of
cash
ISAs,
as
rates
are
good.
“Now
that
the
cash
rates
are
pretty
good,
some
people
are
earning
between
4%
and
5%
on
their
money.
Let’s
say
you’re
a
higher-rate
taxpayer
in
London
and
you’ve
got
£50,000
in
the
bank,
and
its
earning
you
4.5%
in
interest.
“That
is
going
to
generate
around
£2,250
of
interest
every
year
because
you
are
a
higher-rate
taxpayer,
and
only
£500
of
that
can
be
tax
free.
So
you
have
to
declare
the
rest
on
your
tax
return. But
if
you
just
move
£20,000
of
that £50,000
into
a
cash
ISA
this
year
and
use
up
your
cash
ISA
limit,
you
will
save
hundreds
of
pounds
of
tax
immediately.”
Are
ISAs
Complicated?
In
Beavis’s
view,
the
UK’s
ISA
framework
is
too
complicated,
with
four
different
ISAs
with
four
sets
of
rules
and
limits.
The
general
public
does
not
understand
what
it
can
put
in,
where,
and
when.
He
is
among
those
who
feel
sceptical
about
the
arrival
of
the
British
ISA,
which
he
says
will
add
another
layer
of
complication.
But
to
matters
practical,
there
is
no
time
like
the
present
to
get
things
sorted.
For
John
Lyons,
founding
director
of
Clear
Vision
Wealth
Management,
those
rushing
to
put
money
into
ISAs
probably
should
have
started
sooner.
“But
I
would
say
better
late
than
never,”
he
tells
Morningstar,
“especially
if
you’re
looking
at
cash
ISAs.
“The
way
interest
rates
have
gone
up,
it
is
now
possibly
more
important
than
ever
to
shelter
as
much
of
your
interest
from
tax
money
as
you
can
–
and
with
stocks
and
shares
ISAs
specifically
because
the
capital
gains
tax
allowance
is
reduced
from
over
£12,000
to
£6000
this
year
and
£3000
as
of
6
of
April.”
As
a
rule,
Lyons
believes
it
is
imperative
that
people
do
not
leave
using
up
their
ISA
allowance
to
the
last
minute.
“I
used
to
work
for
HSBC,
and
it
never
ceased
to
amaze
me
how
many
people
came
into
the
bank
on
the
last
day
of
the
tax
year.
“But
there
was
no
rush
on
the
first
day
of
the
tax
year,
which
is
really
the
best
time
to
do
it.”
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