Most clients should be purchasing an ISA every tax year. If you are a cautious investor or have only a small amount of money to invest you should select a cash ISA with immediate access. This is more tax efficient than keeping your money in a current account. If you are as non taxpayer there is no point in investing in a cash ISA unless the rate is better than the gross rate you can obtain from any other account.
At Nicholls Stevens we believe it is important for everyone to take advantage of the allowance each year. Clients can, over a number of years build up large funds which are free from CGT and if invested in, say fixed interest securities, also provides a tax free income.
We see many existing ISA holdings re clients have purchased the “flavour of the year” ISA and hung on to it. In many instances these individual holdings do not match the client’s attitude to risk. Nicholls Stevens can review these funds, recommend re-registering on to a Wrap or Platform and then carry out a re-organisation based on an asset allocation which suits your temperament. We can then keep the performance of these funds under review
Your questions answered:
Who can buy an ISA ?
An individual aged 18 or more and is resident or ordinarily resident in the UK. On the death of a spouse, the survivor may transfer the value of his or her spouse’s ISA fund into their own ownership.
a 16 or 17 year old can take out the cash only component
Can I achieve an income?
Yes, if you purchase a cash ISA or a stocks and shares ISA which pays a dividend such as an equity income fund, or a fixed interest or corporate bond fund
Can I have access to my investment?
Yes, at any time unless you have chosen a fixed term cash ISA
What are the tax implications?
Any interest or dividends are paid free of tax, any growth is free of capital gains tax.
What about charges and risk?
You need to carefully read the details of the fund you select
How much can I invest ?
The limit changes each year
Will the limit ever increase?
It is the Government’s intention to increase the allowance each April in line with rpi based on the increase in the rpi the previous September
Can I switch my cash or stocks and shares ISA if I can find a more favourable interest rate or fund?
Yes, you can transfer at any time. This does not have any affect on the ISA allowance for new money in the year you make the transfer. It is also possible to transfer from cash ISA to Stocks and Shares ISA and from stocks and shares to cash.