Tax relief for investors.

The Government wants people to save and invest more for the future, so it offers generous tax incentives to encourage people to do so

Several parts of the tax return deal with the income and profits you have earned on savings and investments – interest payments on bank and building society accounts, for example, and capital gains on disposals of assets such as shares. You can reduce your liability to tax on savings and investments by arranging your finances to take advantage of a number of allowances and tax breaks known as tax relief for investors and savers.


The tax-free Isa allowance is a generous scheme that enables you to shelter a wide range of assets from tax. On 6 April 2015, the annual limit for Isas was increased to £15,240; this will be frozen in 2016. You may opt to hold all your Isa allowance in cash, all in stocks and shares or split the allowance between both.

There is no income tax to pay on income generated by assets held in an Isa. Nor is there any capital gains tax to pay on profits you make when selling assets held in Isas. Your Isa savings and investments do not need to be declared on your tax return.

Junior Isas are a separate allowance for children, enabling you to save money tax-free on their behalf. Gifts you make to a child’s junior Isa are not taxable and the money can be held in cash or stocks and shares. As with the grown-up version, income and gains are tax-free. The Junior Isa allowance in 2015-16 is £4,080.


Arrange your family finances to minimise your tax bill. For example, consider transferring savings and investments to your husband, wife or civil partner if they pay a lower rate of tax than you do. Stop children being taxed at source on their savings by completing a simple form (R85).

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