ISAs

Individual Savings Accounts or ISAs are tax efficient investment vehicles. ISAs can range from the most speculative of shares in emerging economy stock markets to cash in the bank.

The aim when using ISAs is to move your investments from a taxed environment into a more tax efficient environment, and to ensure that new investment funds are invested, from the outset, in a way that minimises tax.

Maxi ISA 

You can invest up to £7000 a year at present. Of this only £3000 can be kept in cash (i.e. on deposit earning interest). In practice people tend to use their Maxi ISA as a vehicle for investing in stocks and shares, or investment funds thereof.

If you wish to manage your own share portfolio then a Self-Select Maxi ISA is the normal vehicle to use.

Mini ISA

You can put £4000 into an Equity ISA (stocks, shares, investment funds), £3000 into a Cash ISA.

There is confusion caused by multiple ISAs. If you have invested this tax year in a Maxi, you cannot have a Mini, and vice versa. If you are dividing up your Maxi ISA, all parts must stay with your fund manager. With Mini ISA you can put each part with a different company.

If you not happy with an existing ISA it is possible to transfer funds from one to another.

In his March 2005 Budget the Chancellor announced that these contribution limits would be kept until the end of the 2009/10 tax year, (ie they would apply to contributions made prior to 6th April 2010).

The value of investments and income from them can fluctuate (this may partially be the result of exchange rate fluctuations), and investors might not get back the full amount invested. Past performance is not a guide to future performance.

Please contact our financial experts to discuss ISAs in more detail.