2 UK growth stocks I would put in an ISA for the long term

A Stocks and Shares ISA can be a great asset for growth investors. However, figuring out what to invest in is also crucial to building wealth in the long run.

I think so Right move (LSE:RMV) i Game workshops (LSE:GAW) look like a great stock to consider for your ISA. They both have something in common that makes them stand out from the rest.

Tax benefits

Investments held in a Stocks and Shares ISA are exempt from dividends and capital gains tax. And this can be a big advantage in terms of overall profits.

Please note that tax treatment depends on each client’s individual situation and may change in the future. The content of this article is for informational purposes only. It is not intended to be and does not constitute any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

In the case of dividends, if I cannot keep all of the income paid to me by the company, I cannot reinvest it. And this may reduce the rate at which my investment grows over time.

With capital gains, the point of getting a large return on my investment is limited if I have to pay it back in taxes when I realize it. This is why ISA is important.

Likewise, however, avoiding taxes on profits is only valuable if the investment generates significant profits in the first place. The key to this is figuring out what to invest in.

Right move

Rightmove has grown its earnings per share by an average of 9% per year over the last decade. As a result, the company’s shares increased by 209%.

Running the UK’s largest property platform doesn’t require a lot of physical resources. As a result, the company managed to pay out 79% of its net profit as dividends.

I believe that the company has a good chance of further earnings growth in the future. And this should translate into higher dividends and share price increases.

Rightmove’s competitive position is currently under threat from a powerful rival and investors should be aware of this risk. However, disrupting the market leadership position will not be easy.

While the barriers to entry may be low, achieving the scale that Rightmove has is likely to be extremely difficult. Therefore, I believe that the company’s shares may be a good investment.

Game workshops

Over the last 10 years, Games Workshop’s earnings per share have risen from 39p to £4.58. This is a stunning rise that has seen the company’s stock soar by 1,700%.

The company’s greatest asset is Warhammer. This enjoys lasting interest among supporters, which is extremely valuable for investors.

Like Rightmove, Games Workshop’s business relies on relatively little physical assets. Therefore, it was able to grow by paying out most of its net income to investors.

The big question is how long this can last. Expansion into new geographic areas has been a key part of the company’s previous growth and cannot continue forever. Moreover, it may be vulnerable to attacks by new competitors in its market.

However, I believe Games Workshop has an extremely strong competitive position and attractive unit economics. And that’s why I bought it on my ISA.

ISSA Investments

As companies grow and distribute large amounts of income to shareholders, investors must keep taxes in mind. And the Stocks and Shares ISA is a great asset here.

I have reached my ISA contribution limit for this financial year. But Games Workshop and Rightmove are stocks I’d like to own or add to my portfolio for the long term.