The Stocks and Shares ISA deadline is rapidly approaching. The deadline for contributions is 5 April, when the new tax year begins. Investors have up until this point to pay in funds up to their £20,000 allowance. The allowance renews in the new tax year, but it is a use it or lose it allowance. Any unused allowance from the current tax year does not roll over — although that does not mean I have to buy shares straight away. As long as the money is in the account by deadline day, I can take my time stock-picking.
But I am planning to make as much use of my £20,000 Stocks and Shares ISA allowance as possible in the current tax year. I do not think I am going to be able to pay in the entire allowance, but I do have a figure of £10,000 available to invest in my favourite stocks and shares.
Picking my top investments
A Stocks and Shares ISA comes with certain tax benefits. Any income or capital gains earned on investments held within one of these wrappers is not liable for tax.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Thanks to this benefit, some investors prefer to hold income stocks rather than growth investments in their ISA portfolios. This is a perfectly acceptable strategy, but as I tend to hold most of my investments inside an ISA, I tend to invest in both income and capital growth opportunities. I do not want to limit myself.
Considering the current geopolitical and economic environment, I am planning to buy a range of defensive investments for my portfolio.
Defensive Stocks and Shares ISA holdings
One such company is the telecommunications group BT. I think this business is relatively insulated from the challenges affecting the global economy and the geopolitical crisis in Eastern Europe. It is investing heavily to build out its fibre broadband network and improve customer service across the country.
While this investment will hold back profits over the next few years, I believe it is the right decision. Rising interest rates could also put profit margins under pressure as BT has an enormous amount of debt. Even after considering these headwinds, I would buy the shares for income and growth in my Stocks and Shares ISA.
Another pick is the Bankers Investment Trust. This company owns a portfolio of international growth and income shares. It has one of the longest track records of dividend increases in the investment trust space. The group has increased its payout every year for the past 55 years. I think an investment trust like this is the perfect way for me to build a diverse portfolio with a large lump sum at the click of a button.
However, there is a risk that by outsourcing the management of the portfolio, I could end up owning investments I would rather not hold. That is something I will be keeping an eye on going forward.