The video is a live Q&A session aimed at UK doctors and other healthcare professionals, focusing on how to use Individual Savings Accounts (ISAs) tax‑efficiently and avoid common pitfalls. The presenter explains how a family of four (two adults and two children) can maximise a total ISA allowance of £58,000, breaking down the adult ISA limit (£20,000 each) and the Junior ISA limit (£9,000 per child). Detailed guidance is given on Junior ISAs – eligibility, cash vs. stocks‑and‑shares options, and why they are generally not recommended for long‑term saving. The tax benefits of ISAs are highlighted, showing that capital gains and dividend income earned inside an ISA are free from CGT and dividend tax. The discussion then moves to Lifetime ISAs (LISAs), covering the £4,000 annual limit, the 25 % withdrawal penalty for non‑qualifying uses, and how over‑contributing to an ISA can be rectified by contacting the provider and possibly withdrawing excess funds. Participants ask about over‑contributing to the £20,000 adult ISA, the interaction between LISA and other ISAs, and the role of Self‑Invested Pensions (SIPs) in a broader tax‑efficient strategy. The presenter reassures listeners that many make these mistakes, offers practical steps to correct them, and briefly promotes a 7‑step guide for doctors to build a solid financial foundation before investing.
Chapters
If you are around the basic rate taxpayer, you might want to come down. Let's say family of 4, let's say there are 2 adults and 2 children. Your total ISA allowance will be worth £58,000. Assuming you started this when your child was born and they're 20 years, after 20 years you've contributed £180,000, whether it's coming from you or from your partner or from the child or from grandparents. Let's say it's gone from £180K to £500K. So now basically there's a capital gains there. Normally you have to pay capital gains, 24% if you're a higher rate taxpayer, 18%. But in this case, your child pays nothing because it's inside an ISA. Right, this is the point where I take questions. So, um, Angie, do you want to go? And then Nimi. Angie first.
Yes, yes, thank you. So you mentioned, um, Junior ISA. So my first question is, can you talk a bit more about that? And then is it part of your £20,000?
Good. Junior ISA, you're allowed a Junior ISA if you are UK resident, you're below 18, and, um, the allowance you can put up to £9,000, which you can either invest it or save it. I don't, I don't, would usually, I wouldn't usually recommend a Junior ISA for saving. It's pointless, especially if the child is 1 year old and doesn't need the money till they are 18. If you are saving for a specific project that happen within the next 3 years. Okay, cash. I think like if you need cash within 3 years, I wouldn't invest it. So Junior ISA could be cash Junior ISA or stock and shares Junior ISA. It's £9,000, is not part of your £20K, so it's a separate allowance. That means as a family of, um, let's say family of 4, let's say there are 2 adults and 2 children, your total ISA allowance will be what? Give me, give me a figure. If you understood what I said, a family of 4, 2 adults, 2 children, what is the total ISA allowance that you can use if you guys were like able to use it all? 58K. Lovely. 58,000. Can you tell us how you arrived at that? 2 adults, each of the adults is 20K, which is 40,000. Each of the younger ones is 9K. Good. So that's why sometimes you need to look at taxes as well.
38,000 per parent, isn't it?
It's 20,000, 20,000. That's 40,000. And then 2 children, that's 9,000. 9,000.
Not each parent can pay 18,000 and 18,000.
No, no, each parent— each adult can get 20,000.
No, no, that is fine. 20 and 20, that's clear.
Good. And then for 2 children, each of them can get 9,000.
Not from each parent, both parents together.
It's no, no.
I like that. Yeah. Okay. But, but it's personal, right? So each person gets their ISA as individual. So it's not what is contributed, it's their allowance. But I like, I like where you're going. Maybe we should propose it to the government. So 9,000 is your allowance. 9,000 is what you get. So that's 9,000 times 2 for 2 children. That's 18,000 plus the parents. Is it, is it clear now? Does that make sense? Now the question is not so much about who is paying into it. The child can pay into it. If the child is doing a job and they're getting like £9,000, they can put into the ISA, right?
But we can't pay into the child's pot.
You can give them money to pay into their pot. You can pay into their pot, but it doesn't help to reduce your taxes. It just helps the child that if that £9,000 grows to £90,000 in the future, they don't have to pay any capital gains tax. If they invested the money and they got dividend, they don't have to pay any dividend tax on it. If the 9,000 there, let's say they're doing 9,000 yearly, 9,000 yearly, assuming you started this when your child was born and they're 20 years, after 20 years you've contributed 180,000. Whether it's coming from you or from your partner, from the child, or from grandparents, at that point they've got 180K. If the money is 180K by the time they are 20, that means things have gone really bad. The investment didn't grow. Or it was just saving. So it could actually double or triple or quadruple. Obviously you can't exactly predict the future, but let's say it's gone from $180K to $500K. So now basically there's a capital gains there from $180K, let's say from $200K to $500K, $300,000 capital gains. 7.
There are 7 steps to take before you even start thinking of investing as a doctor or healthcare professional. Now, this is really important to secure your financial foundation before you start investing. Now, I've covered these 7 steps in a simple guide that I've made available for you in the link in the description. You can download it. It will help you to build a solid financial foundation, avoid common investing mistakes, and also make tax-efficient investment decisions. Start your investment journey the smart way. Download guide now using the link in the description, and good luck on your investing journey. Now let's get right back to the episode.
Normally you have to pay capital gains, 24% if you're a higher rate taxpayer, 18%. But in this case, your child pays nothing because it's inside an ISA. The same with your ISA, okay? And if they were getting a dividend, normally you have to pay dividend tax, which is brutal, but they don't have to pay that dividend because it's inside an ISA. The same if they invested it through their SIP. But if it's in a regular general investment account, they have to pay it. I, I really appreciate the questions you guys are asking, naming Gozi and, and the rest of you, because it's making this session richer and I don't end up assuming you know something and gloss over it. So very good, well done.
Okay, and one more question. And you said about £500 for PSA, that is per year, isn't it?
That's per tax year, but that's for a higher rate taxpayer. For a basic rate taxpayer, it's £1,000. Okay, good. So that's why it's really important, your adjusted net income. If you are around the basic rate taxpayer, you might want to come down if there was a way to do it. But if you're a basic rate taxpayer, yep, that's why you might see a company director might want to make sure that they are a basic rate taxpayer because it affects their dividends as well when they draw the dividends. okay? If that makes sense.
Thank you.
Yes, fabulous. Cheesy, go for it.
Quick one, um, I was about to answer allowance. I understand, yeah, each adult is allowed $20K per tax year. And it's so— it's amazing that I recently found— I'm not sure if I knew all this while or that I've forgotten, I'm not sure— but, um, to find out that this $20K is inclusive of your license So if you did, if you exhausted your 4K from the Lysa, then that leaves you with 16K of the other ISA. I think, I know, I don't know, but one way or the other, I've forgotten about this. And I think at the moment I have been doing— I, I've exhausted my Lysa 4K, and in my ISA it seems I have done over— I have done like, I have maxed the 20. Okay, yeah, and then must lie, sir, as well. Uh, I only found out yesterday after going through the video. I was trying to set my stuff out and yeah, I'm not sure what's my fate. HMRC will come for me, or honestly, I don't know. Uh, Honestly, I don't know what's my fate now, um, if I have to pay anything on whatever top of the $20K ISA or not. So, but at the moment I've stopped my LISA direct debit until, until next tax year, and definitely I maxed the $20K from the ISA, so I couldn't do anything there. Well, I was just wondering what is my fate, uh, if maxed out, I over I over-contributed in the tax year.
Don't worry, look, you'll be surprised how many people make the same mistake. And it's not that you didn't know, but we need to be reminded more than we need to be taught because they are busy with life and work and, you know, career. So yes, you've crossed the ISA allowance. If it all happened, you're very sure that it happened within the same tax year, April 6th to April 5th. What I would do would be to get—
I'm not sure, I think I need to go back and make— yeah, that's inquiring.
So next, go back, check your account, come back to the group. If you still need any help, come back to the private chat group. We will help you. Let's see what to do next. Usually what I would do, I wouldn't, I wouldn't reduce the LISA because LISA has got real penalties. I would rather go for the general ISA, the adult ISA, and speak to the provider to say, look, I've overpaid, can I withdraw some of it? If you decide to sell your stock and shares ISA or withdraw money from your ISA, there's usually no penalty. I mean, not when you've crossed over with LISA. If you withdraw money from LISA and you don't use it for buying your first home or for retirement at 60, you get less than the money you put in. So if you put in 4K and they gave you 25%, your money is now 5,000. If you decide to withdraw that LISA for anything other than buying your first home or retirement, you get 25% penalty on that 5,000, and 25% of 5,000 is 12K. $3,750, you end up with $3,750. So go back and check, make sure it's in the same tax year. If it's in the same tax year, you've exceeded it. It's a common mistake, especially now that people can have multiple ISAs, the same type of ISA. You can have multiple types of ISAs now. Um, if you made that mistake, then you probably need to get in touch with your provider, highlight what has happened. It will not be the first time it's happening, and they will keep give you some direction. But most importantly, wherever you find out get in the group, let's chat, you can ask questions. I think you're in the mastermind now as well, isn't it? Good.
Okay, I don't know if my question will be taking us one step backward, but I think it's, it's still linked with the investment and that you're talking about now. Okay, and I think, um, the use of the pensions, I think it's a very good strategy, and I've only just found out about it recently and trying to do that. Now I'm using the SIP But what I've done so far is just come short of just putting the money there as a pension contribution. Is that the most that I can do with it, or do I need to invest it?
Yes, yes, yes. So that's sort of the next step, isn't it? Like, when you put it there, remember what it is— is a self-invested personal pension, not self-saving personal pension. So I understand where you are, and lots of people also, before they did the investment academy, were there. 'Cause I know someone who's putting like £20,000, but like, yeah, but I don't know how to invest. It's not rocket science. If you learn Krebs cycle, neuroanatomy, sometimes you just need to know what to watch out for, how to do it passively, what type of investor are you? Are you passive or active? What's your risk tolerance? What's your risk capacity? Obviously the 4 Weeks Investing Academy is like a deep dive into all these things. That's what we'll cover. We have just finished one 2 weeks ago. And then those who have finished Investing Academy, they did 4 weekends dealing with stuff like that, going from— even if you are brand new, but some of them were already experienced. I know Barry here had been investing for almost 20 years, and he was part of the academy because he was in the mastermind, so he attended. And there are also some people that were totally brand new to investing. Some of them are here, but I actually now confident with their investing. But after that 4 weekends, we keep them in the group basically for another 4 weeks so that people can implement, ask questions. So don't worry about it, you've already done the tax bit, which is getting it out of your adjusted net income. Yeah, and then investing it is the next step. Um, for stock and shares, I know some people have heard that the cash ISA allowance is being reduced to £12K, so I've heard people talking about putting the extra money in their stock and shares ISA. But leaving it as cash, yeah, that would have been a good idea. But HMRC has come up with a rule. They are planning to tax cash if it's just in stock and shares ISA, if it's not being invested. So learning how to invest and being able to invest without taking too much risk is actually a good asset and the tax-efficient way to go. Thank you for that question. Right.
