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Authorised and Regulated by the Financial Services Authority
INDEPENDENT FINANCIAL ADVICE CENTRE
You should remember that past performance is not necessarily a guide to the future. Market and currency movements may cause the value of units, and the value derived from them, to fall as well as rise and you may get back less than you invested when you decide to sell your units. The tax treatment of investments and pensions is not guaranteed and may change in the future.
Your home is at risk if you do not keep up the payments on a mortgage
ISA’s were introduced by the Government in 1999, effectively replacing PEPs and TESSAs as their favoured vehicle to encourage long term savings via tax benefits.
All of the capital growth from ISAs is tax-free and there is no personal income tax to pay. You don't even have to declare an ISA on your tax return. At the moment ISAs are available to individuals over the age of 18 who are ordinarily resident in the UK for tax purposes (a special cash ISA is available for 16 and 17 year olds).
The current annual ISA allowance is £7,000 each tax year. Within this allowance there are two separate components on offer - Stock & Shares and Cash. Currently these can either be consolidated in one plan (a Maxi ISA) or split into the separate components (Mini ISA’s), each of which can be managed by different companies.
The Government is making changes to the regulations on ISA’s and PEPs. On 6 April 2008 all PEPs will automatically become stocks and shares ISAs. PEPs will no longer exist and your investment will be a stocks and shares ISA subject to ISA rules.
• The total amount you can invest in an ISA each year is increasing from £7,000 to £7,200.
• The entire £7,200 can be invested in a stocks and shares ISA where you are either invested directly in stocks and shares or through a fund that is. Or you could decide to invest up to £3,600 in a cash ISA with the rest being invested in a stocks and shares ISA.
• When your PEP becomes an ISA it won’t count towards your ISA allowance. You’ll still have your full ISA allowance available to invest for the 2008/2009 tax year.
• You can transfer the value of ISA investments from previous tax years, including money in cash ISA’s, into a stocks and shares ISA in addition to the £7,200 limit.
• Mini and Maxi ISA’s will no longer exist. There will simply be cash ISA’s and stocks and shares ISA’s.
• The entire £7,200 can be invested in a stocks and shares ISA where you are either invested directly in stocks and shares or through a fund that is. Or you could decide to invest up to £3,600 in a cash ISA with the rest being invested in a stocks and shares ISA.
• When your PEP becomes an ISA it won’t count towards your ISA allowance. You’ll still have your full ISA allowance available to invest for the 2008/2009 tax year.
• You can transfer the value of ISA investments from previous tax years, including money in cash ISA’s, into a stocks and shares ISA in addition to the £7,200 limit.
• Mini and Maxi ISA’s will no longer exist. There will simply be cash ISA’s and stocks and shares ISA’s.
From 6 April 2004 there has been a reduced tax benefit within ISA’s on dividend income (interest income is unaffected). This means that basic rate taxpayers no longer save tax on dividends, but higher rate taxpayers still avoid having to pay 22.5% tax on the gross dividend (equal to 25% tax on the net dividend).
Even for basic rate taxpayers who may no longer enjoy an income tax benefit, it is still normally prudent to use your ISA allowance for stock market investing provided you are not charged for the ISA 'wrapper '. Unit trust and OEIC providers, as well as fund supermarkets, rarely charge for ISA wrappers when you purchase a fund.
If you are new to investing or would like help with your investment choices, please contact us. Depending on the amount of our input and the amounts to be invested, we may still be able to offer discounts on your investments.
For information on investment risk, please refer to the “Investment Objectives” set out at back of our terms of business. Click here to go to investment objectives.
Self Select & Advised ISA’s
RISK Warning You should remember that past performance is not necessarily a guide to the future. Market and currency movements may cause the value of units, and the value derived from them, to fall as well as rise and you may get back less than you invested when you decide to sell your units. The tax treatment of investments and
pensions is not guaranteed and may change in the future.
pensions is not guaranteed and may change in the future.
