DIY investors reminded of ISA deadlines ahead of crucial tax changes
9th February 2023 11:41
by Jemma Jackson from interactive investor
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Use it or lose it, interactive investor warns ahead of tax changes that could bring more people into the tax net.
Tax planning will be even more important this year, with Capital Gains Tax and Dividend Tax both being cut at the end of the tax year, bringing more people into the tax net.
This, especially within the rising cost of living, means our cash has to stretch much further.
Shielding your investments in a tax-efficient wrapper is the easiest way to make your money work harder for you. An ISA can therefore be a brilliant way to grow your wealth, as your income and gains are not subject to tax. The end of the tax year is 5 April and if you don’t use it, you lose it.
- Learn with ii: What is the ISA Deadline? | Bed & ISA Rules | How many ISAs can I have?
Below, interactive investor, the UK’s second-largest investment platform for private investors, outlines each ISA and Junior ISA deadline to have in your diary. What you decide to put in your ISA is wholly dependent on your financial goals, investment time horizon, and risk tolerance.
It is important to read these deadlines carefully, as there are slight variations on deadline between each type of application.
For those adding money into an ISA/JISA by bank transfer (as opposed to debit card or internal transfer), the deadline is a day early (4 April).
Bed & ISA application deadlines, for example, have an earlier deadline of five days earlier.
Bed and ISA transfers involve moving that money into a more tax-friendly ISA, although you might incur Capital Gains Tax, depending on your circumstances. This can be a great tool for those with investments outside a tax wrapper who haven’t fully used their tax allowance.
The power of regular investing
Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “It’s worth keeping an eye on ISA deadlines because for certain types of payment, or for Bed and ISA transfers, the deadline can come a little earlier.
“Regular investing into an ISA can prove a useful tool for investors, and can also help avoid racing against the clock for the ISA deadline. It is particularly useful in times of market volatility – something which investors will be very familiar with over the last few years – introducing discipline and helping to take some of the emotion out of investing.
“Ultimately, none of us have a crystal ball. Time in the market rather timing the market has proved more impactful over the long term. Regular investing smooths out some of the highs and lows in the price of shares. This is because investors buy fewer shares when markets are high and more when prices are low (this is also known as pound-cost averaging). In doing so, it takes away at least some of the risk of market timing.”
Regular investing is available from £25 per month on interactive investor and is free for investment trusts, funds, ETFs, and popular UK shares.
Dates for your diary – fast-approaching ISA and Junior ISA deadlines
- New ISA applications – Deadline - 11.30pm, Wednesday 5th April*
- New JISA applications – Deadline - 11.30pm, Wednesday 5th April*
- Add money to your ISA/JISA by debit card – Deadline - 11.30pm, Wednesday 5th April**
- Add money to your ISA/JISA by internal transfer - Deadline - 11.30pm, Wednesday 5th April***
- Add money to your ISA/JISA by bank transfer – Deadline - 11.59pm, Tuesday 4th April****
- Bed & ISA/JISA instructions – Deadline 4.30pm, Friday 31st March*****
A reminder of annual allowances:
- ISA subscription limit - £20,000
- Junior ISA (JISA) subscription limit - £9,000
- SIPP Annual Allowance limit - up to £40,000
- SIPP Money Purchase Annual Allowance (MPAA) - £4,000
** Online and Mobile Apps only.
*** Internal transfers between linked accounts only.
**** The deadline for receipt of cleared funds in our bank account. Note, bank transfers can take up to 3 working days to clear from initiation depending on the payment service your bank uses.
***** The deadline for online instructions. Telephone requests will be dealt with on a best endeavours basis after this time.
For more T&Cs and FAQs, see ii’s website, here.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
Please remember, investment value can go up or down and you could get back less than you invest. If you’re in any doubt about the suitability of a stocks & shares ISA, you should seek independent financial advice. The tax treatment of this product depends on your individual circumstances and may change in future. If you are uncertain about the tax treatment of the product you should contact HMRC or seek independent tax advice.