InvestmentsISA’s
Individual Savings Accounts (ISA’s) were introduced by the
current Government in the 1999/2000 tax year to replace the PEP
and TESSA products established under the Conservatives. The PEP
principles of tax-free growth were retained for ISA’s, as was the tax-free
interest offered by TESSA’s on deposit accounts. However, ISA’s
should not be seen as a continuation of PEP’s and TESSA’s. ISA’s
were introduced by the Government to encourage people to put money
aside for the future.
Subject to specific limits you can split your ISA between 2
different components. Within the shelter, all returns will be free
of income tax and CGT and you may withdraw your investment at any
time without loss of tax relief. As the tax benefits are so good
the Government has put a limit on the amount you can save in each
tax year.
So, not only do you have the flexibility to invest tax efficiently
in 2 different ways, when you invest in the stock and shares
component, you can now choose from a wider range of global funds
than previously allowed through PEP investment including property, gilt, bond and fixed interest funds.
Investors must be over 16 for the cash component and 18 for the stocks and shares. When you invest in an ISA you have a choice of investing
in cash or stocks and shares or a combination of both.
What are the contribution limits for an ISA?
The maximum contribution that can be made into an ISA for tax year 2010/11 is £10,200. There is no longer any distinction between maxi or mini ISAs and all ISAs will be classified as either Cash or Stocks & Shares ISAs. The maximum investment into a Cash ISA is limited to £5,100..
How are ISAs taxed?
ISAs are savings and investment products with tax incentives.
Fund taxation
- Capital gains made within the funds are free of capital gains tax (CGT).
- UK dividends are paid with a 10% tax credit which since 6 April 2004, cannot be reclaimed by the PEP/ISA manager.
- Commercial Property funds pay 20% tax on rental income within the fund which cannot be reclaimed by the ISA manager.
- All other income is tax free.
- Cash held in a Stocks and Shares ISA is subject to income tax at 20%
Investor taxation
- Income and gains are free of tax.
- Money can be withdrawn at any time without affecting the tax relief
Can existing ISA holdings be transferred between components?
From 6 April 2008 it became possible to transfer from a Cash ISA (including TESSA Only ISAs, TOISAs) into a Stocks and Shares ISA. It is not possible to transfer from a Stocks and Shares ISA to a Cash ISA. Existing PEPs have been reclassified as Stocks and Shares ISAs and can be transferred to another Stocks and Shares ISA.
PEPs
From 6 April 2008 existing PEPs became Stocks and Shares ISAs and are now subject to the ISA rules.
TRANSFERRING FROM ONE MANAGER TO ANOTHER DOES NOT IN ANY WAY
AFFECT THE FAVOURABLE TAX STATUS THAT THESE INVESTMENTS ENJOY AND CAN BE EASILY ADMINISTERED BY USING A FUND PLATFORM - ASK FOR FULL DETAILS FOR HOW THIS COULD BENEFIT YOU.
Please be aware that past performance is not necessarily a guide to future performance and the value of investments can go down as well as up. You may not get back the amount you invested.
We offer an extremely competitive service, so for more information
regarding ISA's please contact us on:
Telephone: 0115
945 5199 Fax: 0115 982 6250
Between
8.30am and 5.30pm Monday to Friday to discuss your requirements.
E.mail:
info@davidburnell.co.uk
and we will find a cost
effective solution for you.
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David
Burnell Financial Services Ltd
1 Albert Road, West Bridgford, Nottingham, NG2 5GS
Tel: 0115 945 5199
Fax: 0115 982 6250
Email:
info@davidburnell.co.uk
David Burnell Financial Services Limited is an appointed representative of IN Partnership the trading name of The On-Line Partnership Limited
which is authorised and regulated by the Financial Services Authority.
Registered Office 29 Arboretum Street, Nottingham NG1 4JA. Registered in England, Company Number 4619997
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