Sunday 29 January 2012

Guess Who Can Open Two Cash ISAs in One Year!

Here's a new twist that I hadn't heard of, so I'm passing it on - there may be someone in your family who can legally open two Cash ISAs in the same tax year, investing a total of around £9,000.
Now, the DIY Income Investor approach is based on shielding your savings income from tax wherever possible but this sounds too good to be true, doesn't it?

Two bites out of the Taxman's apple? Find out more...

Are there any teenagers in your family?

You should be familiar with the UK's Cash ISA tax shelter. The annual amount you can put in is half that of a Stocks & Shares ISA, but it is still useful for someone beginning to build up their savings. You need to be 16 to open a cash ISA and 18 for a Stocks & Shares ISA.

The novelty here is the Junior ISA (JISA) which has recently been introduced for teenagers. The full £3,600 JISA amount can be saved in cash or divided between cash and Stocks & Shares. And the loophole is that 16 to 18-year-olds can open both in the same tax year - something that is not allowed for anyone else.

The adult Cash ISA limit is £5,340 (or £5,640 next tax year) and the Junior ISA limit is £3,600, meaning  that these lucky youngsters can save around £9,000 each tax year in cash ISAs.

Thanks to Moneywise for the original article.

I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

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