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ISA Investment

An ISA (Individual Savings Account) is a UK investment that has certain tax benefits. Most ISA's are flexible enough for you to be able to invest either as a lump sum or monthly.

ISA’s can into effect in April 1999. They replaced PEPs (Personal Equity Plans) and Tessa’s (Tax Exempt Special Savings Accounts). From the 2008/2009 tax year, it was possible to transfer from a Cash ISA to a Stocks and Shares ISA. Before 2008/2009, it was impossible to transfer between component types.

ISA investments can be used for Capital Growth, income or a combination of income and growth.

Any transfer must be done between the managers. If a saver transfers the money themselves, it will be treated as a withdrawal. They cannot invest this in an ISA if they have used their allowance for the tax year.

Eligibility for an ISA.

If you wish to invest into an ISA you must be over the age of 18 (or 16 if for a cash ISAs). You must also be living in the UK for Tax Purposes or an employee of the crown and paid by the Government whilst working abroad. An ISA cannot be owned jointly or by a company.

Dealing with ISA Providers

It is possible to transfer between ISA providers. It is now possible to use a facility called a fund platform that gives access to a broad range of funds. You can transfer monies either in whole or just part of the investment. If you wish to transfer monies that have been invested into the current tax year then you must transfer all the investments proceeds for that year.

Limits on ISA's

From the 6/10/2009 the limits on ISA's increased for investors over the age of fifty. If you are under this age you will have to wait until the next tax year.

A total subscription limit of £10,200 is available, which may be invested:
• Up to £5100 in cash with the remaining £5,100 to invest into a stock and share isa.
or
• Use the full allowance into Stocks and shares up to £10,200.

If you have already contributed to an isa in the current tax year and are over the age of fifty, you can top up to make use of the increased allowance.

Existing Individual Savings Account investors

If you hold ISA's from previous tax years it might be worth using a facility called re-registration. This allows you to combine all of your stocks and shares ISA's without having to sell investments. For more information on our service, please see our re-registration page.

Taxation of isa investment returns.

Any investment returns that are received are mainly tax-free. Since April 2004, income from equities or equity (share) based unit trusts held within an ISA will have a tax of 10% deducted. It is not possible to reclaim this tax.

Any income from cash and fixed interest funds are classed as paying interest. The fund manager can reclaim a tax credit of 20% internally. This does not apply to the investor.

As an Isa investor you do not need to provide information to the tax man if you complete a UK tax return.

In the event of your death then the value of your ISA's will be added to your estate for UK inheritance tax purposes.

Latest ISA interest Rates

For details on the latest investment rates for mini cash ISA's, please click here.

Independent Financial Advice

As independent financial advisers we can provide impartial advice on any existing or possible investment may want to make. If you would like to discuss your circumstances on investing in more depth, please contact us.

If you are thinking about investing it is important to remember that the value of your investment money and any income you take can fall as well as rise. There is no guarantee you will get back more than you invested.