Buying ISA Stock and Shares near end of tax year

huzaifa7

Hi,

I already have cash ISA for this tax year (09/10) but have not used the remaining ISA allowance in Stock and Shares.

I was wondering if I was to invest the remaining amount into a S and S near the end of the financial year..lets say in February or March, then is this a good idea?

I don't know much about S and S and was assuming that if I was to invest nearer the end then I'm probably reducing my risk and hopefully get a decent return on it.

Any advice on this and advice on any good S and S ISAs?

Thanks

C_Mababejive

What would be the point in buying a S&S ISA unless;

You are a higher rate taxpayer

and/or

You had bought a lot of stock and intended to keep them for a long time thus dealing with any possible CGT issues in future

Aegis

huzaifa7 wrote: »

Hi,

I already have cash ISA for this tax year (09/10) but have not used the remaining ISA allowance in Stock and Shares.

I was wondering if I was to invest the remaining amount into a S and S near the end of the financial year..lets say in February or March, then is this a good idea?

I don't know much about S and S and was assuming that if I was to invest nearer the end then I'm probably reducing my risk and hopefully get a decent return on it.

Any advice on this and advice on any good S and S ISAs?

Thanks

You don't reduce your risk by waiting. Stocks and shares ISA invest money into assets which can generally be bought and sold as required. Buying at the end of the financial year should make next to no difference, rather you should aim to buy when the markets are low (relatively) and sell when they are high (relatively).

Aegis

C_Mababejive wrote: »

What would be the point in buying a S&S ISA unless;

You are a higher rate taxpayer

You might be one some day.

and/or

You had bought a lot of stock and intended to keep them for a long time thus dealing with any possible CGT issues in future

Invest the limit for 10 years and you would have c£100,000 in a tax-sheltered environment assuming no growth. That gives you a lot of scope for buying and selling assets without (a) filling out a tax return, and (b) incurring a chargeable gain under capital gains tax. I've seen someone who's managed to get half a million inside their ISA from careful dealing over the last decade. That's £500,000 he won't have to pay any additional income tax or capital gains tax on.

You have to start out somewhere, and as it doesn't necessarily cost anything to invest into an ISA, it's a no brainer.


EDIT: there's also the fact that basic rate taxpayers can own fixed interest assets inside an ISA without paying basic rate tax on the income.

dunstonh

What would be the point in buying a S&S ISA unless;

You are a higher rate taxpayer

and/or

You had bought a lot of stock and intended to keep them for a long time thus dealing with any possible CGT issues in future

Fixed interest sector investments within an ISA are tax free.

Over 65s dont have income or interest from ISAs going towards their age allowance reduction figure.

No administration required re buys and sells in respect of IHT

No cost difference most of the time for using the ISA to wrap the investments compared to having them unwrapped.

I have clients with hundreds of thousands of pounds in ISAs now. The income within the funds if not held in an ISA could take some into higher rate tax or see their age allowance reduced. So, the question really is why shouldnt he/she use an ISA?

C_Mababejive

Aegis wrote: »

EDIT: there's also the fact that basic rate taxpayers can own fixed interest assets inside an ISA without paying basic rate tax on the income.

Ohh?? do tell,,this is new to me. What instruments might be deemed to be fixed interest assets Dunst;?

Aegis

C_Mababejive wrote: »

Ohh?? do tell,,this is new to me. What instruments might be deemed to be fixed interest assets Dunst;?

Corporate bonds and gilts, plus funds which invest into those. Interest received is usually taxed as savings income.