ISA’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

Investor taxation

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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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.

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