Ndubuisi Egwim walks through how to use UK ISAs to avoid tax on investment gains. Max out a Lifetime ISA first to get the government bonus, then split the remaining £16,000 of your £20,000 annual allowance across cash and stocks ISAs.
£20,000 per year.
£4,000 per year.
Up to £1,000 per year.
£16,000.
£6,000.
Excellent. What's the best way to combine the ISAs to get the best tax savings? I'll give you my own experience and my own example. Of course, this is not financial advice. Now, the annual ISA allowance per year is £20,000. So all the ISAs, you can't put more than £20,000. Specifically for Lysa Lifetime ISA, the maximum you can put in is £4,000 to get the government bonus, up to the maximum of of 1,000 per year. So a strategy that I've used that you may find useful is first of all to max out my life the £4,000 in and get that £1,000 bonus. Then I split the rest of the 20,000, which would be £16,000 now, between the various ISAs. For example, you decide to put £6,000 in the cash ISA as your emergency fund. That's your saving that the money can fall back on if you don't have any income for the next three months, depending on what your expenses is. Join my tax hack X Ray Challenge for doctors and healthcare professionals.
