What sort of shares is it best to put in an ISA e.g. high yeild/growth?

Question

thanks.

Answer 1

ISA's are 'Tax free' ... but you can't claim back the Tax already paid on Dividends and you have an annual Capital Gains allowance of about £8,000.

So if you expect to exceed your Capital Gains allowance in any one year (because you expect to sell growth shares that have increased in value by more than £8000) then buy these growth shares within the ISA.

Since higher rate Tax payers have to pay additional Tax on dividends, then (assuming you are not going to exceed your Capital Gains allowance) you should buy high yield shares in the ISA.

It makes little difference to standard rate tax payers ... I would use a SIPP for Growth shares and ISA for high yield shares.

When you retire you can draw on the ISA tax free. This allows you to use your entire Personal Allowance to minimise any Tax liability when you 'retire' from the SIPP, go into drawdown and take a pension.

Answer 2

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