Stocks and Share's ISA - How do they Work?

Cotta
Cotta Posts: 3,667 Forumite
in Savings & investments
Hi All,

A few people have recommended S&S's ISAs to me, however how do they work, what is the best way to take them out and what sort of returns can investors expect?

Thanks
«13

Comments

  • ColdIron
    ColdIron Posts: 9,044 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Maybe make a start here?
    https://www.moneysavingexpert.com/investments/
  • ConMan
    ConMan Posts: 108 Forumite
    You need to read up on it. There are plenty of articles on the internet about S&S ISAs, including the above.
    You'll find me sat in the corner with a pack of dry roasted and a Guinness.
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Short answers: They exempt investments from UK income tax and capital gains tax. Use a platform.
    Slightly better than unwrapped stocks and shares.

    Long answers at
    http://monevator.com/get-an-isa-life/ among others.
    Eco Miser
    Saving money for well over half a century
  • chrisgg
    chrisgg Posts: 68 Forumite
    Cotta wrote: »
    how do they work

    They are exempt from capital gains and income tax.
    Cotta wrote: »
    what is the best way to take them out

    Via an investment platform.
    Cotta wrote: »
    what sort of returns can investors expect?

    That depends on the underlying investments, which in turn should depend on your attitude to risk and time horizon.

    I suggest either reading up on investing on sites such as monevator or forking out for an investment house or IFA to manage it for you.

    Also there's no apostrophe in 'shares'. Plural not possessive. Pet peeve of mine. :o
  • Cotta
    Cotta Posts: 3,667 Forumite
    chrisgg wrote: »
    They are exempt from capital gains and income tax.



    According the Martin's link as I don't have capital gains then these are of no use to me.


    Via an investment platform.


    Is this something I setup myself or through a bank?



    That depends on the underlying investments, which in turn should depend on your attitude to risk and time horizon.

    I suggest either reading up on investing on sites such as monevator or forking out for an investment house or IFA to manage it for you.

    Also there's no apostrophe in 'shares'. Plural not possessive. Pet peeve of mine. :o


    Is it not possessive as it's part of the ISA?


    Thanks, a few comments above.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    First Anniversary Name Dropper First Post Photogenic
    Cotta wrote: »
    Thanks, a few comments below.



    According to Martin's link as I don't have capital gains then these are of no use to me.


    Eh? If you have no investments then you wont have capital gains now. In the future you may have if your investments perform well. If you have investments they need to be held somewhere. You might as well hold them in something (an ISA) that means you have less (no) paperwork to complete when doing tax returns.

    Is this something I setup myself or through a bank?


    You open one up in the same way you'd open a new bank account, via a company that provides them.
  • CatLady13
    CatLady13 Posts: 87 Forumite
    First Anniversary
    Cotta wrote: »
    Also there's no apostrophe in 'shares'. Plural not possessive. Pet peeve of mine.


    Is it not possessive as it's part of the ISA?.

    In its entirety, the full name is "Stocks and Shares Individual Savings Account", so shares is plural not possessive.
  • TheTracker
    TheTracker Posts: 1,223 Forumite
    Combo Breaker First Post
    You may not see a need because CGT seems a distant constraint. But if held outside tax wrappers and you need to access a good portion of the money suddenly you could be exposed to a CGT charge. Or it could grow into a sum where even regular withdrawal starts to reach the CGT limit (eg taking 6% out of a £200k pot). It can also simplify tax returns since you don't need to worry about declaring any gains. I'm not one for most Americanisms, and they don't have the equivalent of ISAs, but there is something to be said for the label of "tax advantaged accounts". An ISA is just an account with tax advantages and contribution limits.
  • Prism
    Prism Posts: 3,803 Forumite
    First Anniversary Name Dropper First Post
    You can set one up yourself through most banks, insurance companies or specialised investment platforms. Or you can get an IFA to set one up for you.

    You shouldn't 'expect' any kind of return at all but you might get somewhere between 3% and 30% on any given year. You need to be prepared to lose up to 50% or more if the stock market crashes (though it does tend to recover).
  • Cotta
    Cotta Posts: 3,667 Forumite
    TheTracker wrote: »
    You may not see a need because CGT seems a distant constraint. But if held outside tax wrappers and you need to access a good portion of the money suddenly you could be exposed to a CGT charge. Or it could grow into a sum where even regular withdrawal starts to reach the CGT limit (eg taking 6% out of a £200k pot). It can also simplify tax returns since you don't need to worry about declaring any gains. I'm not one for most Americanisms, and they don't have the equivalent of ISAs, but there is something to be said for the label of "tax advantaged accounts". An ISA is just an account with tax advantages and contribution limits.


    That makes sense so effectively within the SASs ISA, they are except from tax up to a certain limit?


    How about choosing a platform for the SAS ISA and whether to self manage or allow the platform to mange it?
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