How to avoid paying taxes on your investments

The only thing that stands in your way when you want to get a loan is the interest component of the loan, but that is no longer a problem with ISAs

08:20 22 September 2013

When you see a product you would like to buy, or when you need money for a big investment such as your child going to college or purchasing a new car, you will most likely think about taking up a loan. But the idea that you would end up paying 150% of the product's price is very difficult to grasp for some. This is why the UK Government has launched the ISA investment account.

The ISA investments account is the most efficient way of borrowing up to £11,520 per year, and has the great benefit of having no tax payment at all. Another good thing about it is that virtually any UK citizen over the age of 18 can get one.

Let's a take a look at the particular features of the ISA investment account:

• there are two major types of ISA investment accounts, one is for cash savings, and the other is for stock and share investments;

 

• There are more methods of constructing your investment account through the ISA, each one of them focused on your long term goal. One of them is opting for a Junior Account; the other is a Child Trust Fund. You may actually be allowed to switch your investments from a Junior to a Child Trust Fund later on;  However, the Junior Investments Account is only applicable to juniors who do not qualify for a Child Trust Fund, so make sure that you check the requirements before applying to that investment account. Also, your child has to have been born between September 2002 and January 2011 to qualify for a Child Trust Fund.

 

• The National Savings and Investments is the UK government’s solution for guaranteeing that the investments you make are properly secured and no risks are involved with regard to the financial institution;