Home > Accounting and Tax Guide

Tax Efficient Investments in 2013/14

Investing wisely is about more than just putting money away on a regular basis. It’s also about more than just finding the savings account or investment opportunity that offers the highest interest rates or ROI. Wise investors should always take into account the tax limitations of each particular tax year, from April to April, in order to make the most of each investment opportunity. This is because, with the majority of investments, you will need to pay tax on the interest you accrue.

Planning for a New Tax Year

The tax year in the UK lasts from April to April. Any investments which you make will be assessed in this time frame. At the beginning of each new tax year the thresholds for investments are examined and either increased, decreased or kept the same. This is why it’s important to keep an eye on any possible changes to your tax free allowances. Sometimes, investors find that it’s more efficient to re-invest their savings every year, in order to minimise the potential loss of revenue caused by going over allowances.

In the new tax year for 2013/14, taxpayers have been given an increased personal allowance, whilst age-related personal allowances have been frozen at the same level they were at in 2012. In addition, more people are set to pay higher levels of tax – based on income – and the top rates of income tax have fallen by as much as 5%. High earners get no personal allowances, but there is good news for those investing in ISAs, as the tax free limits for all ISAs has risen.

Tax Efficient Portfolios

The key to managing a great financial investment portfolio is to make it as tax efficient as possible. A portfolio will allow you to make the most of each opportunity, dispersing your money between them for the maximum return on your investment. But creating a comprehensive financial investment portfolio takes time and knowledge, and is sometimes easier said than done. This is why many people looking to make the most of their finances choose tax efficient investments from SPI, who offer a comprehensive investment management service.

Tax Free Investing

There are some investment opportunities which give you a tax-free return. However some of these come with limitations, such as the amount of money you can invest before taxes are levied. And some are only tax free if you are on a lower income. Before you settle on an investment opportunity, it’s always important to check your eligibility for tax free investing beforehand. This will help you identify and make the most of any and all tax efficient investment opportunities.

comments powered by Disqus