Lifetime ISA (LISA) Explained from line 210 income tax return Watch Video

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✓ Published: 08-Apr-2024
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Lifetime ISAs – also known as LISAs – are a form of ISA. They allow some people to save for a first home or retirement tax-free and with a government bonus. Here’s everything you need to know.

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In the United States, debt has more than tripled since 2008, surpassing 30 trillion dollars for the first time in 2022. Elevated levels of government spending compared with the previous century brings the nation’s deficit into the spotlight every few years as the statutory limit on government debt is reached. This statutory limit is often referred to as the “debt ceiling,” and the U.S. government reached this limit once again in January 2023. The debt ceiling limits the total amount of money that the government is authorized to borrow in order to meet its existing legal obligations and it does not have an active role in limiting new commitments to spending.<br/><br/><br/>Due to the fact that only Congress has the authority to borrow money, the debt ceiling can only be increased by legislation raised by the House of Representatives. This means that negotiations with the president are not necessary to raise the debt ceiling, but have increasingly become a political bargaining tool, especially when Republicans have control of Congress alongside a Democratic president. While the U.S. has one of the highest debt to GDP ratios worldwide, the country has, thus far, maintained strong confidence in its ability to pay back its debts.<br/><br/>Historical context<br/><br/>Whenever the debt ceiling is reached, the U.S. Treasury employs “extraordinary measures” – accounting tools that curb certain investments so that the government can continue to keep paying its financial obligations for a limited amount of time. The debt ceiling has been raised many times since 1960 - 49 times under Republican presidents and 29 times under Democratic presidents. Historically, these raisings have happened without a debate, but are increasingly used as a way to force Democratic presidents to the negotiating table.<br/><br/>In the U.S., the Republican Party has long styled itself as the party of low government spending and oversight. The party frequently criticize Democrats for perceived excessive spending and overreliance on government social programs to address societal issues. Though while it may be the case that Democratic Presidents have contributed to the deficit through social programs such as the Affordable Care Act, Republican leaders have equally contributed to government debt through other means like tax cuts. Additionally, global emergencies such as the 2008 financial crisis and COVID-19 pandemic have required increased governmental spending to protect the economy and the individuals within it.<br/><br/>The 2023 debt ceiling crisis<br/><br/>House Speaker Kevin McCarthy secured his position as Speaker of the House in 2023 by promising to fight for spending cuts, refusing to raise the debt ceiling without spending negotiations with President Biden. The party position remains that big Democratic spending has disproportionally raised the national debt and that reforms were needed before the debt ceiling can be increased again. Democrats responded to this by pointing to 2021, a year in which the Republican Party increased
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Forecasting investing cash flow involves predicting the cash that will be used for or generated from investments in assets such as property, plant, equipment, and financial instruments. Here's a step-by-step guide on how to forecast investing cash flow:<br/><br/>Review Capital Expenditure Plans: Start by reviewing your company's capital expenditure plans. These may include investments in property, plant, equipment, and other long-term assets. Identify the timing and magnitude of these investments.<br/><br/>Asset Depreciation: Consider the impact of depreciation on cash flow. Depreciation expense is a non-cash item that reduces net income but does not affect cash flow. However, when you purchase new assets, you will incur cash outflows that need to be accounted for in your forecast.<br/><br/>Asset Disposals: If your company plans to sell any existing assets, forecast the cash inflows from these disposals. Consider the expected sale price and timing of the transactions.<br/><br/>Acquisitions and Investments: If your company plans to acquire other businesses or make investments in financial instruments such as stocks or bonds, estimate the cash outflows associated with these activities. Consider the purchase price, transaction costs, and any financing arrangements.<br/><br/>Divestitures and Dividend Income: Forecast any cash inflows from divestitures or the sale of investments. Additionally, consider any dividend income from investments in stocks or other income-generating assets.<br/><br/>Financing Arrangements: Consider the impact of financing arrangements on investing cash flow. For example, if your company plans to finance capital expenditures through debt or equity issuance, forecast the cash inflows associated with these transactions.<br/><br/>Non-operating Income or Expenses: Identify any non-operating income or expenses related to investing activities, such as gains or losses on the sale of investments or impairment charges on long-term assets. Adjust your forecast accordingly.<br/><br/>Tax Implications: Consider the tax implications of investing activities. Certain investments may have tax consequences that affect cash flow. Consult with your tax advisor to ensure your forecast accurately reflects these considerations.<br/><br/>Scenario Analysis: Conduct scenario analysis to assess the impact of different variables on your investing cash flow forecast. This will help you understand potential risks and opportunities associated with your investment decisions.<br/><br/>Build the Forecast Model: Use a spreadsheet or financial modeling software to build your investing cash flow forecast. Organize your forecast by month, quarter, or year, depending on your needs.<br/><br/>Validate and Review: Validate your forecast by comparing it to historical data and adjusting as necessary. Review your assumptions and make sure they are realistic and based on reliable information.<br/>
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Financing cash flow refers to the cash inflows and outflows related to the financing activities of a company, including transactions involving debt, equity, and dividends. It reflects the cash generated from or used for financing the company's operations, investments, and other activities. Financing cash flow is reported in the cash flow statement, one of the three main financial statements along with the income statement and balance sheet.<br/><br/>Here are some key components of financing cash flow:<br/><br/>Issuance of Debt: Cash inflows from issuing debt securities such as bonds or loans. When a company raises funds by issuing debt, it receives cash, which is reported as a positive figure in the financing cash flow section.<br/><br/>Repayment of Debt: Cash outflows from repaying debt obligations. When a company repays its debt, it uses cash, which is reported as a negative figure in the financing cash flow section.<br/><br/>Issuance of Equity: Cash inflows from issuing equity securities such as common stock or preferred stock. When a company raises funds by issuing equity, it receives cash, which is reported as a positive figure in the financing cash flow section.<br/><br/>Repurchase of Equity: Cash outflows from repurchasing company shares. When a company buys back its own shares from the market, it spends cash, which is reported as a negative figure in the financing cash flow section.<br/><br/>Payment of Dividends: Cash outflows from distributing dividends to shareholders. When a company pays dividends, it uses cash, which is reported as a negative figure in the financing cash flow section.<br/><br/>Financing-related Costs: Cash outflows related to financing activities, such as fees paid to lenders or underwriters for arranging financing transactions. These costs are reported as negative figures in the financing cash flow section.<br/><br/>The financing cash flow section of the cash flow statement provides investors and analysts with insights into how a company raises and uses external funds to support its operations, investments, and dividend payments. It helps stakeholders assess the company's financial health, capital structure, and ability to manage its financial obligations.
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