stocks & shares ISAs

chesky

Someone on my local website has posted that stocks and shares ISAs aren't worth investing in unless you're a higher rate tax payer - or only for capital gains reasons. As someone who has invested in them since they started I feel I don't agree but I'm not sure why. For a couple of years I was in a higher tax bracket but now I'm retired. I have about £100,000 in them so surely it wouldn't be a good idea to close them down and put them in 'ordinary' savings, would it?

eskbanker

Ignore your local website! It's clearly true that any tax-free savings or investment arrangement will work relatively better for higher rate taxpayers than basic rate payers but that's not the same as saying you should extract your pot into taxable status if you don't pay higher rate tax!

Having said that, if you're retired then presumably at some point you'll be thinking about adjusting the balance between investment products and cash in your portfolio anyway?

chesky

Oh, please don't blind me with science! I leave the details to my IFA; I do remember them saying they adjusted things with cash, but can't remember the exact numbers - will ask them next time I meet them. (Just to pretend I know what I'm talking about)

opinions4u

Retired people can still make capital gains.

le_loup

chesky wrote: »

I have about £100,000 in them so surely it wouldn't be a good idea to close them down and put them in 'ordinary' savings, would it?

Apart from the CGT implications should you sell, there can be a massive record keeping issue of purchases/sales/dividends which would have to be reported to HMR&C were the investments held outside an ISA

jimjames

opinions4u wrote: »

Retired people can still make capital gains.

If anything they are more likely to make capital gains as the portfolio should be proportionately larger if it has been built up over a number of years than someone just starting out investing.

kidmugsy

Leave be; but remember that it's income tax and CGT that they are free from, not Inheritance Tax.

eskbanker

chesky wrote: »

Oh, please don't blind me with science! I leave the details to my IFA; I do remember them saying they adjusted things with cash, but can't remember the exact numbers - will ask them next time I meet them. (Just to pretend I know what I'm talking about)

Yes, if you have an IFA that takes care of your arrangements then best to take advice from them rather than your local website or even this one - although there are many folk on here who are well-informed, your IFA will naturally have far greater visibility of your exact circumstances than can be gleaned from posting on here, and is obviously also properly qualified to give financial advice!

atush

chesky wrote: »

Someone on my local website has posted that stocks and shares ISAs aren't worth investing in unless you're a higher rate tax payer - or only for capital gains reasons. As someone who has invested in them since they started I feel I don't agree but I'm not sure why. For a couple of years I was in a higher tax bracket but now I'm retired. I have about £100,000 in them so surely it wouldn't be a good idea to close them down and put them in 'ordinary' savings, would it?

your website has a numpty or two I think.

You not only get interest tax free (on cash) you get dividends w/o HRTax, and you get capital gains tax free. Now, this is something newbies dont think about, but if you invest your full 12K or so each year for a few years and get good growth, selling could could bring you out higher than your CGT exemption. So is worth looking at. Not to mention that capital growth plus dividends can and has been higher than bank rates of interest.

chesky

le_loup wrote: »

Apart from the CGT implications should you sell, there can be a massive record keeping issue of purchases/sales/dividends which would have to be reported to HMR&C were the investments held outside an ISA

Yes, of course I do realise that (as I do a self assessment every year) and that was why I couldn't see why the poster was sounding so definite in her statement on my local website - thought there must be something I hadn't known.

chesky

eskbanker wrote: »

Yes, if you have an IFA that takes care of your arrangements then best to take advice from them rather than your local website or even this one - although there are many folk on here who are well-informed, your IFA will naturally have far greater visibility of your exact circumstances than can be gleaned from posting on here, and is obviously also properly qualified to give financial advice!

I have absolutely no intention of taking her advice; the correspondence was nothing to do with me - I was just an interested looker-on but was appalled that others might think she was right.

And even on this magnificent site, I take a lot of what's written with a pinch of salt.:)