Individual Savings Accounts (ISA’s)
An ISA is a great way to save money. In fact it is probably the best way in the UK at the moment. This is because of two basic facts about ISA’s.
1. Any Profits made within an ISA are Tax Free
2. Any dividend Income withdrawn from an ISA is Tax free
I imagine most of you know exactly what an ISA is but from my experience clients have often been confused by what ISA’s are and what they can do. Here are some facts about ISA’s to clear up some mis-conceptions.
- An ISA is effectively a wrapper which sits around your savings
- Inside that wrapper you can hold Cash, Shares, Bonds, Funds. In fact any Investment which is traded on a Recognised Investment Exchange – Which is most large Stock Exchanges.
- Capital Financial Markets offer an ISA called a Self Select ISA. This means it can hold any combination of Investments which meet the rules.
- Some providers such as large Fund Management companies offer an ISA. Often their ISA Wrapper can ONLY hold their OWN Investment Funds.
- So the Capital Financial Markets ISA is very flexible as you could hold a variety of different Investments within your ISA.
- As previously mentioned any Capital Gains held within an ISA are TAX FREE
- Any Income derived from Investments held within an ISA are TAX FREE
- The annual Allowance each Individual (adult) can put into an ISA is £11,520 for the Tax year 2013 / 2014
- There are also JUNIOR ISA’s. For under 18’s.
- The Limit that can be put in a Junior ISA each year is £3,720
- Money in a Junior ISA CAN NOT be with drawn until the individual is 18 And there are NO exceptions to that rule.
- Grandparents could gift money for example to their Grandchildren. After 7 years the money would fall outside your estate for IHT
If you would like to open an ISA account with us, print off the attached and post to us. The ISA account will be opened the day the form is received ISA APPLICATION.
AIM STOCKS CAN NOW BE HELD IN ISA’s
- AIM stocks (stocks on London’s junior market) can be held in ISAs from August 6th!
- This is important because: 1. Some AIM stocks might be tomorrows winners.
- In addition SOME (and you need to speak to an advisor such as CAPITAL FINANCIAL MARKETS) qualify for Business Property TAX relief if you hold such a qualifying investment for TWO years or more. (once the cash has been held in qualifying Investments for 2 years you can switch between such investments, you don’t have to keep it in the first one). BPR relief means that that money falls outside of your estate for INHERITANCE TAX Purposes.
- Therefore in an ISA you can AVOID CAPITAL GAINS TAX, INCOME TAX ON DIVIDENDS and INHERITANCE TAX !!!
Click ISA APPLICATIONto Open an ISA now
Call us on 020 3697 0560 if you would like further information.