Tax Efficient Investments

Individual Savings Account (ISA):the income and gains are free of UK income and capital gains tax, but the 10% tax credit on dividends from UK companies is not repayable
The maximum investment in 2008/2009 is £7,200 (£7,000) with separate limits for each of the stocks and shares, and cash components.ISA tax benefits apply to Personal Equity Plans (PEP's).

Investment Limits 2008/09 Maximum Contributions

Investment Component 2008/09 2007/08
Stocks & Shares £7,200 £7,000
Cash £3,600 £3,000

Venture Capital Trusts (VCT's) Income tax relief at up to 30% (30%) on qualifying investments of up to £200,000 (£200,000) per year and dividends and capital gains exempt from tax. Capital gains can no longer be deferred into VCT'S.

Enterprise Investment Scheme (EIS)

Income tax relief at up to 20% (20%) on subscription to eligible shares of up to £500,000 (£400,000) and exemption on capital gains, or relief for losses, for income tax or capital gains tax purposes. Unlimited gains on disposals may be deferred into eligible shares.