Recent Budgets have imposed extra tax burdens on investors:

The dividend allowance for 2024/25 (and 2025/26) is now just £500 – enough to cover only the average dividends from about £15,000 of UK shares.

The CGT annual exemption has similarly been reduced to £3,000 against £12,300 in 2022/23.

The personal savings allowance, worth a tax saving on interest of up to £200 for basic and higher rate taxpayers, has been left unchanged since it was first introduced in April 2016 (when the Bank of England base rate was 0.5%). Even if the allowance had been inflation-linked it would be about a third above its current level in 2025/26.

The continued tightening of the tax screw on investments, makes the tax-efficiency offered by ISAs ever more valuable. As a reminder, all

ISAs offer five core ISA tax benefits:

  • Dividends are of UK income tax (but could be subject to foreign withholding tax).
  • Capital gains are free of UK CGT.
  • Interest earned on fixed interest securities and cash is also free of UK income tax.
  • ISAs can be transferred to a surviving spouse or civil partner on death, retaining their tax freedoms until either the administration of the estate is complete, the ISA is closed, or the third anniversary of the death, whichever is sooner.
  • Income and gains from ISAs do not have to be personally reported to HMRC.

The maximum total contribution to ISAs is £20,000 per tax year for 2024/25 (and all the way through to 2029/30), while, for Junior ISAs (JISAs), the maximum is £9,000. The main contribution limit was last increased in 2017 and the freeze until the next decade, announced in the Autumn 2024 Budget, is effectively another ratcheting up of investment taxation – making the most of ISA tax benefits even more important.

ISA contribution limits operate on a strict tax year basis – there is no carry forward. The message is simple: use it or lose it.

Get in Touch

Need help making the most of your ISA tax benefits? We’re here to offer clear, practical advice on how to protect your investments from rising taxes. Whether you’re reviewing your portfolio, planning future contributions, or just want to understand your options, our team can help.

We’re based in Eastbourne, East Sussex and work with clients across the South East, including Hastings, Lewes, Brighton, Bexhill, Uckfield, Heathfield, Newhaven, Seaford, Tunbridge Wells and beyond.

To learn more about our services, watch our helpful videos explaining how we operate under FCA guidelines. For additional expert advice, don’t miss our financial blogs, packed with valuable insights on tax planning, investment strategies, and more.

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As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.

It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

The information contained within the blog is for information purposes only and does not constitute financial advice.

The purpose of the blog is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.