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quick question on shares isa
Horlock
Posts: 1,027 Forumite
Can someone please explain something I don't understand about shares isas.
With a cash isa I can open a new one with a new provider each tax year, and provided I don't invest more than the limit I can add to each isa each year.
So for example if I open a cash isa with barclays this year with £500 then I could still add £500 to my last years isa with halifax and £500 to the previous years lloyds isa etc.
What I'm wondering is whether this is the same with a shares isa. I had always assumed so. But when I just went to open shepherds shares isa and started to complete the online application, it said I was agreeing to "subscribe" to an isa in 2013-2014 and each subsequent tax year. I don't want to remove my ability to have a different shares isa in 2014-2015. Logic says that this must be incorrect as it appears that one can transfer shares isa from one provider to another (which doesnt really work if the existence of the first stopped the second being created)
Can anyone confirm that if I open a shares isa with shepherds today (2013-2014), pay in a regular £50 per month, then in Novemeber (2014-2015)decide I want a new shares isa with another provider then I can do this with eg £2000 (still well below the annual limit)
Thanks
With a cash isa I can open a new one with a new provider each tax year, and provided I don't invest more than the limit I can add to each isa each year.
So for example if I open a cash isa with barclays this year with £500 then I could still add £500 to my last years isa with halifax and £500 to the previous years lloyds isa etc.
What I'm wondering is whether this is the same with a shares isa. I had always assumed so. But when I just went to open shepherds shares isa and started to complete the online application, it said I was agreeing to "subscribe" to an isa in 2013-2014 and each subsequent tax year. I don't want to remove my ability to have a different shares isa in 2014-2015. Logic says that this must be incorrect as it appears that one can transfer shares isa from one provider to another (which doesnt really work if the existence of the first stopped the second being created)
Can anyone confirm that if I open a shares isa with shepherds today (2013-2014), pay in a regular £50 per month, then in Novemeber (2014-2015)decide I want a new shares isa with another provider then I can do this with eg £2000 (still well below the annual limit)
Thanks
There is no intelligent life out there ... ask any goldfish!
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Comments
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That is not my understanding.
ISA's are limited by the contribution and the time.
If you put money into an ISA, you are putting money into this year's ISA.
If your existing ISA's are with different providers, and you put money into each of them, they will all assume you are starting a new ISA with them for this year and they will create these new ISA's for you. This may cause problems with the taxman.
So you should only put money into this year's ISA.
Applies to both cash and S&S ISAs.0 -
Horlock, your understanding is incorrect.
Any ISA allowance you have not used at the end of a tax year is lost forever. You can no longer make use of any allowance you had in 2012-13 and earlier. No different for cash or S&S ISAs.
You *are* able to change ISA provider any time you like, unless you have a fixed term account. If you want to change provider for any of the current year contributions, all current year contributions must be transferred. You must ask the new provider to make the transfer as otherwise you would lose the tax wrapper on all the money your transfer.
The question about investing in subsequent years is in literally all ISA T&Cs. You can safely accept that term because you will not be forced to make any contributions in subsequent years, and you are free to make such contributions with a different provider.
On a slightly different note: never heard of Shepherds in the contact of an S&S ISA. It is almost certainly a very expensive way to invest. And there are many better options.0 -
Horlock, your understanding is incorrect.
Possibly, but you do seem to have misunderstood what I thought.Any ISA allowance you have not used at the end of a tax year is lost forever. You can no longer make use of any allowance you had in 2012-13 and earlier. No different for cash or S&S ISAs.
I know you can't use previous years allowance. I want to use next years allowance shared between an existing isa and a new isa. Eg adding £500 to my old isa and opening a new isa with £500. So total investment in tax year is only £1000. Basically, I want to be able to invest today and next month without forcing all 2014-2015 investments to go into that isa. Ie if a good deal becomes available in november I want to be able to make use of it.You *are* able to change ISA provider any time you like, unless you have a fixed term account. If you want to change provider for any of the current year contributions, all current year contributions must be transferred. You must ask the new provider to make the transfer as otherwise you would lose the tax wrapper on all the money your transfer.
I thought you were not allowed to open a second isa in the same tax year at all. You certainly need to sign to say you haven't already opened one.The question about investing in subsequent years is in literally all ISA T&Cs. You can safely accept that term because you will not be forced to make any contributions in subsequent years, and you are free to make such contributions with a different provider.
Where exactly and what exactly does it sayOn a slightly different note: never heard of Shepherds in the contact of an S&S ISA. It is almost certainly a very expensive way to invest. And there are many better options.
Shepherds is a safe investment today (only)! Invest £350 over three months get almost£150 cashback from topcashback!There is no intelligent life out there ... ask any goldfish!0 -
Possibly, but you do seem to have misunderstood what I thought.
I know you can't use previous years allowance. I want to use next years allowance shared between an existing isa and a new isa. Eg adding £500 to my old isa and opening a new isa with £500. So total investment in tax year is only £1000. Basically, I want to be able to invest today and next month without forcing all 2014-2015 investments to go into that isa. Ie if a good deal becomes available in november I want to be able to make use of it.
I thought you were not allowed to open a second isa in the same tax year at all. You certainly need to sign to say you haven't already opened one.
Where exactly and what exactly does it say
Shepherds is a safe investment today (only)! Invest £350 over three months get almost£150 cashback from topcashback!
If the new/current ISA is with the same provider and the same product as the old ISA, then no problem.
If however the ISAs are with different providers then there is a problem.
ANY AND ALL money you put into an ISA either by 5th April, or after 5th April, will be considered to be part of that year's ISA.
So if you put in money before the end of this tax year, then it will go toward a 13/14 ISA. If you put money in the next tax year, then it will considered in that tax year. You cannot put money into an ISA started in a previous tax year, unless you are with the same provider and starting another ISA with them in the given tax year.
There is one situation where you can put money into ISAs with two different providers in one tax year. That is if you open a cash ISA and S&S ISA in the same year. Then you can put money upto the limit in both ISAs, but the money will be counted as being submitted in the given tax year.
HTH0 -
If the new/current ISA is with the same provider and the same product as the old ISA, then no problem.
It can still be a problem with the same provider. Some Building Societies (Nationwide, KRBS and I think one other) allow you to spread your annual allowance across several of their ISAs. But not every provider does.0 -
I know you can't use previous years allowance. I want to use next years allowance shared between an existing isa and a new isa. Eg adding £500 to my old isa and opening a new isa with £500. So total investment in tax year is only £1000. Basically, I want to be able to invest today and next month without forcing all 2014-2015 investments to go into that isa. Ie if a good deal becomes available in november I want to be able to make use of it.
The rules are no different to cash ISAs. You can't add cash to multiple cash ISAs and nor can you do so for S&S ISAs.
I'm not sure what you mean about a good deal though. S&S ISAs don't operate in that way - it is purely a wrapper for investments and an investment that can be put in your ISA now could be put in your ISA in Nov if you have chosen the right wrapper. If you can't put cash in to buy it (if it is last year's ISA) then you can always sell something else in the ISA to raise the money to buy it.Shepherds is a safe investment today (only)! Invest £350 over three months get almost£150 cashback from topcashback!
What is Shepherds? An ISA provider or a fund you are buying?
S&S ISAs differ from cash in that they are a wrapper that allows you to buy investments inside it. A S&S ISA isn't safe, it is only the product you buy inside it that can be considered that.Remember the saying: if it looks too good to be true it almost certainly is.0 -
with very few exceptions (see previous post) this is not possible.I know you can't use previous years allowance. I want to use next years allowance shared between an existing isa and a new isa.
the way you do this is by asking the new provider to transfer your ISA. It would in most cases be difficult to understand why you would not want to transfer your old ISA if there is a better deal.Ie if a good deal becomes available in november I want to be able to make use of it.
You are not opening a second ISA, you are just changing provider. You are allowed to change provider any time you like.I thought you were not allowed to open a second isa in the same tax year at all.
By the very fact that you are allowed to change your provider any time you like, the "and all future years" clause is utterly redundant. It's just used by providers to make people think they should stay with them.Where exactly and what exactly does it say
You can find the gory detail here: http://www.hmrc.gov.uk/isa/isa-guidance-notes.pdf, but a shorter version is here: http://www.hmrc.gov.uk/isa/faqs.htm#6
EDIT: having further investigated the Sheperd's ISA, it appears that you could (or would) indeed not transfer it to anyone else, either in the current or future years. They aren't even talking about transfers out, and it would be prohibitively expensive to transfer in the early years since you could only transfer cash. It is a truly horrible product.
They might be safe but they are without a shadow of a doubt not a smart ISA choice. Just think about it, who do you think is paying the £350 in the first place? And a lot more.........Shepherds is a safe investment today (only)! Invest £350 over three months get almost£150 cashback from topcashback!
The Sheperd ISA looks totally intransparent, you have no idea what exactly they are investing your money in, and you have no means of comparing their charges and their performance with anyone else.
I am providing the link in case anyone else wants to have a look at it but please please don't waste your money with them! The cashback is a total red herring, it's just there to catch the innocent . http://www.welcometoshepherds.co.uk/landing-page/isa-tc?utm_source=OMG&utm_medium=Topcashback&utm_campaign=isa&utm_term=26220 -
http://www.shepherdsfriendly.co.uk/pdfs/ISA%20Key%20Features.pdf?utm_source=OMG&utm_campaign=isa&utm_medium=UKC%20Systems%20Ltd&utm_term=2622
Initial charge: 3%
AMC: 1.5%
:eek::eek::eek:
These are truly horrendous numbers. You can get a huge number of investments with 0% initial charge, and the annual charge, including the platform charge, should be well below 1%.
As I said earlier, guess who pays for the TCB cashback.0 -
Initial charge: 3%
AMC: 1.5%
:eek::eek::eek:
These are truly horrendous numbers. You can get a huge number of investments with 0% initial charge, and the annual charge, including the platform charge, should be well below 1%.
As I said earlier, guess who pays for the TCB cashback.
Shocking that they are promoting it as safe yet take 3% off your investment before you even start. That means your investment needs to grow at 3% more than mine just for you to get back to the money you put in.
And then take the annual fees, you'll have to grow by 1% more a year just to keep up with my fund that only charges 0.5%.
At £50 per month after 5 years, you'll have paid in a total of £3000. If the investment grows at 5% per year you'll get the princely sum of £3270 back. That's less than 10% growth in 5 years and shows the effect of such high charges.
How has it performed compared to the FTSE 100 index? Good, bad, indifferent? No I don't know either as they don't list actual performance just examples of the fees at certain levels.
Overall a very bad deal and a shame that they've chosen to relegate the charges to a fair way down the document and not even disclose how the fund has performed.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Thank you all very much for the quick and very helpful responses. Well worth asking the question from my perspective. Thanks again.There is no intelligent life out there ... ask any goldfish!0
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