Share's ISA - complete newbie

longwalks1

Hi all

Am looking to open an ISA to trade shares with, I understand the £10,100 limit per year (provided no cash tax free savings), if I was to buy/put £10k worth of shares into an ISA before April 5th, then another £10k into one aafter the 5th (for year 2011/2012), would it go into the same ISA, resulting in £20k in one, or would I have 2 running side by side?

Also, (serious wishful thinking here), if the £10k I put into an ISA for my 2010/2011 allowance suddenly doubles, then in September I want all of the money out, is that possible? or is there a 'minimum holding period'?

Thanks in advance and no doubt I'll be asking more questions very soon

hbakhshi

To an extent this depends on the provider you choose. You can usually put £10k each tax year, so for example I have an ISA stocks and shares account with X-O. I can put £10k into it this financial year, up to March, year and then anther 10k into it after April for the next financial year. It all accumulates into the same account.

You can usually take it out when you want but once you have used your allowance, you cannot reuse it. So if you put £10k in April, then decide to take it out in May, that's it for the year, you have used your allowance.

There are some situations where you are buying a product, rather than opening up an account. In this case you buy a different ISA each year and there may be a minimum investment term.

Mikeyorks

britishboy wrote: »

I understand the £10,100 limit per year

The ISA allowance is £10200 this year ........... and £10680 from 6th April. In each case the cash element is a maximum of 50% (ie £5100 and £5340 respectively).


Previous response mainly covers your other queries.

lisyloo

You can usually take it out when you want, but be aware that stocks & shares have some volatility and can go up or down, so it's not generally regarded as a good place for short term money and that's because you may find you have less than you put in.
Generally the minimum is tradionally regarded as 5 years, because in general the growth would have exceeded the point where any downward swings of the market mean you get less out than you put in, however there are no guarantees with this.

I would say don't use equities for money you think you MAY need short term. That's because it might be worth less when you need it.

Have some cash for short term needs and then if the market is down you at least have the option to leave your equities alone for a bit.

You need an emergency fund for - job loss, car repairs, roof repairs, boiler repairs etc. before you start thinking about investments.

longwalks1

Thanks everyone

So if I put 10k in before April, then miraculously then doubled or more, could i take it all out in June or July, and still put in 10k for my 2011/2012 allowance?

Would i pay CGT that way? Basically trading through my ISA, would i pay CGT if i made over £10,100 profit on a sale?

longwalks1

PS, I will only be investing shares/share dealing in an ISA, never cash (not yet anyway)

cheerfulcat

britishboy wrote: »

Thanks everyone

So if I put 10k in before April, then miraculously then doubled or more, could i take it all out in June or July, and still put in 10k for my 2011/2012 allowance?

Take the money out of the ISA? That would be a daft thing to do! Or do you mean sell the shares and crystallise your gain?

Your allowance for 11/12 is unaffected by what you do with the previous years' allowances.

Would i pay CGT that way? Basically trading through my ISA, would i pay CGT if i made over £10,100 profit on a sale?

No. The ISA shelters any gains ( and any interest from gilts/bonds ) from taxation.

hbakhshi

britishboy wrote: »

Thanks everyone

So if I put 10k in before April, then miraculously then doubled or more, could i take it all out in June or July, and still put in 10k for my 2011/2012 allowance?

Would i pay CGT that way? Basically trading through my ISA, would i pay CGT if i made over £10,100 profit on a sale?

Yes you can take it out any time on most accounts. Yes you can still invest up to the limit in 2011/2012, regardless of how your investments from the previous year grew.

You would pay no CGT as long as everything was done through your ISA, no matter how large the profit.

Stocks and Shares ISA's are restrictive in what you can invest in, you cannot buy just anything. So pretty much all UK unit trusts, all UK shares on the LSE and even foreign shares on recognised stock markets are in. AIM shares and FX are out.

lisyloo

So if I put 10k in before April, then miraculously then doubled or more, could i take it all out in June or July, and still put in 10k for my 2011/2012 allowance?

Yes you can do that and no CGT however high the gain.
BUT the benefit of ISAs is the tax ffree allowance is for the REST OF YOUR LIFE.
Therefore if you have the money long term it would be silly to lose your 2010/2011 allowance.
We've been putting money in ISAs for a long time and we now have a six figure sum and that really makes a difference. We could keep those allowances for a further 40 years, so the real value with the ISA is when you accumulate and hold them long term, then the tax benefits are significant.
Once you lose a particular years allowance it's gone forever. You do get new ones of course, but you lose the old if you withdraw.

longwalks1

hbakhshi wrote: »

Yes you can take it out any time on most accounts. Yes you can still invest up to the limit in 2011/2012, regardless of how your investments from the previous year grew.

You would pay no CGT as long as everything was done through your ISA, no matter how large the profit.

Stocks and Shares ISA's are restrictive in what you can invest in, you cannot buy just anything. So pretty much all UK unit trusts, all UK shares on the LSE and even foreign shares on recognised stock markets are in. AIM shares and FX are out.

Awwwwwwww is this the case with all share ISA's? :(

hbakhshi

britishboy wrote: »

Awwwwwwww is this the case with all share ISA's? :(

LOL... Somehow I had the feeling you were off down that track.

Yes it is, with the exception of some, mainly oil and mineral companies, that have a dual listing, AIM here and a real stock market in another country.

Just had another thought though, there used to be special schemes and rates for CGT on AIM companies, may have gone now and I think you had to hold onto the shares for a while. Try Googling it.

Please don't tell me how you intend to double your money in 4 months, I might be tempted, I'm a sucker for a good gamble, and I'd rather keep plodding along....