By Daniel Hunter

Within the next few weeks, in the run up to the April 5 deadline, there is expected to be a big surge in applications from both savers and investors for Stocks and Shares Individual Savings Accounts (ISAs).

ISAs have grown in popularity following the Chancellor’s emergency tax increase in the summer 2010, which now means high rate tax payers would be paying 28% more on capital gains tax and have more recently found favour as savers look to shares to provide higher rates of return.

A rush in applications for stocks and shares ISAs is anticipated as people look for a tax free shelter.

Through investing in Stocks and Shares ISAs, individuals can get tax breaks that allow investors to save on paying capital gains tax or higher-rate tax on dividend income, with no need to include these accounts on their annual tax return. People can either invest the full £10,680 allowance or chose to divide the allowance and invest in both cash and Stocks and Shares ISA’s.

“We believe as an investor you should use your full ISA allowance before investing using a regular stockbroking account," John Douthwaite, CEO of SimplyStockbroking said.

"ISAs are a great way to hold your savings and investments without having to pay capital gains tax. A Stocks and Shares ISA is ideal if you are the type of investor who wants tax-efficiency with the ability to exercise control when, where and how your money is invested.

“By making an ISA a part of your investment portfolio, you can enhance its overall productivity. ISAs can work well as a long-term savings vehicle alongside your pension arrangements. They give you tax benefits with the flexibility of being able to withdraw funds or to create a tax efficient reserves for a rainy day.”

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