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Tax Exempt Special Savings Account |
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Tax Exempt Special Savings AccountA five year tax free savings scheme for people aged 18 and over, introduced by the government in January 1991 and operated by banks and building societies, but terminated in 1999.The maximum amount which could be paid into such schemes over the five year life of the TESSA was £9,000 according to the following schedule:1st year, £3,0002nd year, £1,8003rd year, £1,8004th year, £1,8005th year £600TESSAs were discontinued on 5th April 1999 although those taken out before then are allowed to run their full five year term. If you own a TESSA, you can do three things with it when it matures:You can withdraw the interest and capital free of tax, and either spend it or invest it elsewhere.You can move the capital into a 'Matured TESSA Account'. The interest earned in the account after the maturity date will be taxable.You can move the capital (but not the income) into an ISA account where it can continue to grow tax free. It can either be paid into a special Tessa-only ISA account (a TOISA) or it can be paid into a cash only mini ISA. The move has to be made within 6 months of the maturity of the TESSA.Similar MatchesMutual Savings BankMutual Savings BankAn institution owned by its depositors, as evidenced by certificates of deposit rather than stock. These institutions are active in long term real estate financing, as opposed to commercial banks, which concentrates more on short term loans. Lifelong individual savings accountLifelong individual savings accountSee 'individual savings account'. Individual savings accountIndividual savings accountA tax-favoured savings account introduced on 6th April 1999 which replaced PEPs and TESSAs. ISAs are not an investment in their own right. They are a tax-free wrapper in which you can shelter investments.People over the age of 18 living in the UK can invest a maximum of £7,000 per year in each tax year. 16 and 17 year olds can invest up to £3,000 in a mini cash ISA.Investment may be made in three components: equities, cash and life assurance. There are strict limits on how much you can put in each component, and the limits depend in part on whether you use a 'maxi ISA' or a number of mini ISAs.Until 5th April 2004 ISAs benefit from a 10% tax credit on UK equities. Stock and share investments which can be held in an ISA include unit trusts, open ended investment companies (OEICs), investment trusts, ordinary shares, preference shares and fixed interest corporate bonds.PEPs in existence at 6th April 1999 may continue to be held outside an ISA with the same tax advantages. TESSAs in existence at 6th April 1999 are allowed to run their full five year term.Income from ISA investments is tax free and you don't have to report it on your tax return. Capital gains are also exempt from CGT.ISA plans are sold by stockbrokers, IFAs, fund managers, banks and other authorised financial institutions. You can buy a plan and take advice on what to put in it, or you can have a 'self-select' ISA and make your own decisions. Registered Retirement Savings Plan (RRSP)Registered Retirement Savings Plan (RRSP)Tax-sheltered retirement plan for Canadian citizens, much like an American IRA. Savings Association Insurance Fund (SAIF)Savings Association Insurance Fund (SAIF)A government organization that ../../finance-glossary/d the Federal Savings and Loan Insurance Corporation as the provider of deposit insurance for thrift institutions. Further SuggestionsNational SavingsSavings deposits savings element Savings bond savings and loan association Individual Savings Account National Savings Bank Savings bank Savings and loan association Post Office Savings Savings element savings account Financing Cost Savings Savings And Loan Association Federal Savings and Loan Association Bonds Enabling Annual Retirement Savings (BEARS) Savings rate National Savings Stock Register Mutual savings bank mutual savings bank |
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