| What
are ISAs? |
| They
are a tax efficient wrapper for individual
investment. They are very flexible as you
can contribute when you like, and take your
money out when ever you like. |
 |
| To
qualify for an ISA you have to be 18 or ove
r(16 for a cash iSA) and UK Resident for
tax purposes, (strictly speaking Resident
and Ordinarily Resident), and/or a Crown
employee paid by the Government while working
overseas, (e.g. diplomats and armed forces). |
|
| All
ISAs are owned by an individual. No joint
ISAs, no ISAs held on behalf of others, (though
there is nothing to stop you setting up an
ISA in your own name and handing the proceeds
to someone else, e.g. a child, in the future). |
| |
| Charges
and CAT standards: |
| Plan managers
can impose any terms or charges that they
like (as they can with any investment), but
those that meet certain criteria laid down
by the Government for low Charges, easy Access
and fair Terms can claim to meet the CAT
Standards. While this is a useful standard
it has the effect of limiting the options
open to the Plan Manager. It is important
that you are sure that you want your ISA
to operate within these restrictions. They
could result in your fund performance being
lower than otherwise. |
| |
| Transferring
funds between ISAs: |
Broadly
speaking you can transfer funds between managers
whenever you want, but see the Maxi and Mini
details below. Also plan managers are free
to impose restrictions and terms on transfers.
When transferring money invested in previous years you can move it in whole or
in part.
When transferring money invested this year you must transfer ALL of the money
invested to the new ISA. |
| |
| Tax
Aspects |
 |
There is
no income tax on any income, or capital gains
tax on any gains. (Corollary - no CGT losses
within the ISA can be used to offset gains
outside it). Life policy proceeds are tax
free. |
|
There is
no need to tell the Inland Revenue anything
about your ISAs. You don't even have to tell
them that they exist. |
|
ISAs end
on death, and their value at that time IS
included within your estate for Inheritance
Tax purposes. |
|
| ISAs
come in two main forms - Maxi and Mini, plus,
for the moment TESSA ISA. |
|
| Maxi
ISA |
| Always
use a Maxi ISA if you want to invest more
than £3000 in stocks and shares that
year. |
|
|
You can invest up to £7000pa, The funds can be invested in Stocks and Shares,
or, if you prefer, up to £3000 can be invested in Cash, and £1000
in Life Assurance. |
|
| The monies
invested in one component must stay with
that component until cashed in, even if you
transfer to another plan manager. |
|
| For further help and free
advice please email
us. |
| |
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