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    1. Is a stocks and shares ISA right for me?

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    March 2023

    Is a Stocks and Shares ISA right for me?

    J.P. Morgan Asset Management

     

    A Stocks and Shares ISA – or Individual Savings Account – is a tax-efficient way to help build long-term savings and boost your future wealth. Every adult can invest up to £20,000 into an ISA in the 2022/23 tax year. This allowance can be split between a Cash ISA, which is for cash savings, and a Stocks and Shares ISA, which allows individuals to invest in equities and bonds.

    Tax-efficient savings

    Investing in an ISA allows you to keep more of your gains, since less is handed over to the taxman. ISAs offer three main tax savings for investors:

    1. Capital gains tax exemption
      There is no capital gains tax (CGT) to pay on any investment gains from ISAs. If you are saving over a longer period of time and using the allowance each year, this can be a significant advantage.

    2. Income tax savings
      Higher and additional-rate tax payers do not have to pay any additional tax on share dividends received within an ISA. In addition, the income received on bonds is paid tax-free; this applies to basic-rate taxpayers as well.

    3. Tax-free withdrawals
      There are also tax savings when you come to cash in your ISA. If you take a regular income from these savings plans you don’t have to declare this on your tax return and there is no further income tax to pay. This isn’t the case with income taken from a pension.
       

    Finally, ISAs can be transferred to a spouse free of inheritance tax when you die. A surviving spouse does not have to cash in ISA assets, which can be added to their ISA allowance for that year.

    Exciting investment opportunities

    A stocks and shares ISA allows investment in equity markets, bond markets and even a range of multi-asset funds, which will include cash and property holdings.

    A stocks and shares ISA allows investment in equity markets, bond markets and even a range of multi-asset funds, which will include cash and property holdings. Investors can buy individual shares or they can choose to invest in funds or investment trusts. While shares and pooled funds, such as OEICs, can be a popular choice to invest in global markets, investors should also consider the benefits of investing in a Stocks and Shares ISA via investment trusts.

    The closed-ended structure of an investment trusts makes them ideally suited for longer-term investment strategies, as investment trust managers don’t have to sell their investments or keep large amounts of cash for when investors want their money back. Investment trusts can also borrow money to invest – known as gearing – which can enhance long-term performance (although gearing can also increase short-term volatility).

    A Stocks and Shares ISA can be more volatile than cash, particularly over the shorter term. For this reason you should only consider a Stocks and Shares ISA if you can keep your money invested for the long term, ideally for more than five years.

    However, investing in a Stocks and Shares ISA using investment trusts can help investors access some of the most exciting investment opportunities in the UK and around the world. Many investment trusts help investors to share in the long-term growth potential of the UK stock market, for example, while others can invest internationally, including across global emerging markets or the Asia-Pacific regions. And each trust benefits from the guidance and insights of professional fund managers.

    J.P. Morgan Asset Management has more than 20 investment trusts, including growth and income options. Each of our investment trusts can be accessed through a Stocks and Shares ISA, allowing savers to benefit from the backing and resources of one the UK's largest investment trust managers.

    Find out more about J.P. Morgan’s range of Investment Trusts >

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    On the Minds of Investors

    Drawing on the depth and breadth of their market and economic expertise, our global macro strategists offer insight into today's big investment themes to enable more confident portfolio decisions.

    Views on today’s key investment themes

    Grow your Income and Capital: ISA opportunities for this tax year

    Discover how you can shape up your savings plans and invest in our range of investment trusts to maximise your stocks and shares ISA potential. 

    Find out more

    This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. Investment is subject to documentation. The Annual Reports and Financial Statements, AIFMD art. 23 Investor Disclosure Document and PRIIPs Key Information Document can be obtained in English from JPMorgan Funds Limited or at www.jpmam.co.uk/investmenttrust. This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

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