How to Make Your Investments Tax-Free: A Comprehensive Guide

tax free investments

In today’s financial landscape, maximising your investment returns while minimising tax liabilities is crucial for building long-term wealth. This guide explores various tax-free investment options available in the UK, helping you make informed decisions to optimide your financial future.

Individual Savings Accounts (ISAs)

Individual Savings Accounts (ISAs) are one of the most popular tax-efficient investment vehicles in the UK. They offer a tax-free wrapper for your savings and investments, allowing your money to grow without the burden of income tax or capital gains tax.

How ISAs work

ISAs come in several forms, including:

  1. Cash ISAs: For saving money with tax-free interest
  2. Stocks and Shares ISAs: For investing in stocks, bonds, and funds
  3. Innovative Finance ISAs: For peer-to-peer lending investments
  4. Lifetime ISAs: For first-time homebuyers or retirement savings

You can contribute up to £20,000 per tax year across all your ISA accounts, making them a flexible option for tax-free investing.

Junior ISAs

Junior ISAs (JISAs) are designed to help parents and guardians save for their children’s future. These accounts work similarly to adult ISAs but have a lower annual contribution limit of £9,000. The funds are locked until the child turns 18, at which point the account converts to an adult ISA.

Child Trust Funds

While Child Trust Funds (CTFs) are no longer available to new applicants, existing accounts continue to benefit from tax-free growth. If your child was born between September 1, 2002, and January 2, 2011, they may have a CTF. These accounts can be transferred to Junior ISAs for potentially better returns and more investment options.

National Savings and Investments (NS&I)

NS&I offers a range of savings products backed by the UK government, some of which provide tax-free returns:

  1. Premium Bonds: While not guaranteed, any prizes won are tax-free
  2. Junior ISA: A tax-free savings account for children
  3. Investment Account: While interest is taxable, it’s paid gross without tax deducted

Pension Savings

Pensions are an excellent way to save for retirement while enjoying tax benefits:

  1. Personal pensions: Contributions receive tax relief at your marginal rate
  2. Workplace pensions: Often benefit from employer contributions and tax relief
  3. Self-Invested Personal Pensions (SIPPs): Offer more control over investments with tax benefits

Children’s pensions

You can start a pension for a child from birth, with contributions up to £2,880 per year receiving 20% tax relief, boosting the total to £3,600. This long-term planning can provide significant tax-free growth over time.

Tax-free Interest on Bank and Building Society Accounts

The Personal Savings Allowance (PSA) allows basic-rate taxpayers to earn up to £1,000 in savings interest tax-free each year. Higher-rate taxpayers have a £500 allowance, while additional-rate taxpayers do not receive this benefit.

Your Capital Gains Tax (CGT) Exemptions

Understanding and utilising your CGT exemptions can significantly reduce your tax liabilities:

  1. Annual exempt amount: Currently £12,300 for individuals (2023/2024 tax year)
  2. Transfer assets between spouses: To utilise both partners’ CGT allowances
  3. Bed and ISA: Sell investments and repurchase within an ISA to shield future gains

Do You Need Tax Advice?

While this guide provides an overview of tax-free investment options, individual circumstances vary. Consider seeking professional tax advice to ensure you’re making the most of available tax-efficient strategies and complying with current regulations.

Useful Tools

To help navigate the world of tax-free investing, consider using:

  1. ISA comparison websites
  2. Pension calculators
  3. CGT calculators
  4. Investment platforms with tax-wrapper options
  5. Robo-advisors offering tax-efficient portfolios

Alternative Investments London

Oakmount and Partners is a leading alternative investment introducer based in London. We specialise in connecting investors with unique, tax-efficient investment opportunities that go beyond traditional asset classes. Our team of experts can guide you through the complexities of alternative investments, helping you diversify your portfolio while potentially minimising tax liabilities. Whether you’re interested in real estate, private equity, or other alternative assets, Oakmount and Partners is your trusted partner in the world of innovative investing.

Related posts:

Can you have a joint ISA?

What does ISA mean?

Can you transfer cash isa to stocks and shares?

Picture of Rachel Buscall

Rachel Buscall

Co-Founder & Managing Director at Oakmount and Partners.

Download Our Brochure

  • How to Invest?
  • Access To Exclusive Oppourtunities
  • What The Potential Fixed Rates Are?
  • How Oakmount and Partners Can Maximise Your Portfolio
  • What Investment Oppourtunities New Captial Link Has To Offer

Oakmount and Partners

Alternative investment specialists offering structured opportunities across the UK & Overseas.

Oakmount and Partners is a boutique London-based introducer that offers unique UK & global investment opportunities worldwide.

Facebook-f Twitter Instagram Linkedin

Recent Posts

Follow Us

Copyright © Oakmount & Partners Ltd 2025. All rights reserved.

The content of this website has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this website for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.

Important Notice : Investment products are available to you on the basis that you are reasonably believed to be such a person as is described in Article 19 (Investment professionals), Article 48 (Certified high net worth individuals), Article 49 (High net worth companies, unincorporated associations, etc.) Article 50 (Sophisticated investors), Article 50A (Self-certified sophisticated investors) and Article 51 (Associations of high net worth or sophisticated investors) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or you are a person to whom this information may otherwise lawfully be sent or viewed. If you do not fall within such descriptions, then you should not act upon the information contained on this website. Oakmount and Partners acts as a professional introducer and receives a fee from their working partners for every introduction made. 

IMPORTANT INFORMATION

This website is exempt from the general restriction (in section 21 of the Financial Services and Markets Act 2000) on the communication of invitations or inducements to engage in investment activity on the grounds that it is made solely to certified or self-certified sophisticated investors, certified high net worth individuals and investment professionals. These investments are high risk and illiquid, your capital is at risk and returns are not guaranteed. Bonds are not protected by the Financial Services Compensation Scheme (FSCS). If you are unsure of your categorisation or have doubts about whether to invest in our products, please consult an authorised person specialising in advising on investments of this kind.

Definitions of each categories

By pressing Confirm, this will have the same effect as if you had signed such a statement in writing.

If you don’t meet any of the criteria below, then you must STOP and leave this site.

You can find definitions of each category below.

To be considered a self-certified sophisticated investor, an individual must certify that at least one of the following applies:

They are a member of a network or syndicate of business angels and have been so for at least six months.

They have made more than one investment in an unlisted company in the two years prior.

They work or have worked in the two years prior in a professional capacity in the private equity sector or in the provision of finance for small and medium enterprises.

They are currently or have been in the two years prior, a director of a company with an annual turnover of at least £1 million.

A) Works in the Financial Sector , specifically private equity OR B) Been the director of a company with an annual turnover of at least £1 million, in the last two years OR C) or made more than one investment in an unlisted company in the previous two years.
A HNW Investor has an annual income in excess of £100K or. have net assets in excess of £250K beyond your pension fund assets and your private residence.
I Disagree