Full ISA Guide Discussion Area

jowie

badger09 wrote: »

If you want to transfer existing ISA savings, make sure you use the correct process. This is always handled by the new ISA provider.

Unless I'm missing something, it seems a bit strange that every year you have to manually open a new ISA account and do the transfer. Surely there are some banks that have automated this system for you? I mean, as soon as the tax year ends, they could create a new account for you, transfer your previous funds into the new account and then issue you with a new account number to deposit your allowance for the new tax year...

Am I missing something?

innovate

yes you are missing something. You do not actually have to open a new ISA each year - many (e.g. all the instant access ones) can run more or less forever. However, the interest you get after about a year will normally be so dire that you want to open a new one (and also transfer your existing ISA(s) to better paying ones).

jowie

innovate wrote: »

the interest you get after about a year will normally be so dire that you want to open a new one (and also transfer your existing ISA(s) to better paying ones).

I see, thanks. If so many people are doing this, I'm surprised the banks don't advertise a "Super ISA" that you can apply for, whereby they do all the switching for you to give you the best interest rates... But I guess that's asking too much :P

merlin777

In a stocks and shares ISA interest on dividends is deducted at basic rate of 10% so if you are a higher rate tax payer you benefit from the difference. If, in a given year, you earn less than the basic rate threshold, can you claim back any of that 10% tax on the dividends?

lisyloo

whereby they do all the switching for you to give you the best interest rates

It's not in the banks interest to give you the best rates.
They give the best rates the tarts who switch whilst loyal customers dwindle on old products. This is well known.
What you are saying would be in customers interests but not in the banks intertest.
Apathy rules.

Archi_Bald

merlin777 wrote: »

In a stocks and shares ISA interest on dividends is deducted at basic rate of 10% so if you are a higher rate tax payer you benefit from the difference. If, in a given year, you earn less than the basic rate threshold, can you claim back any of that 10% tax on the dividends?

I don't believe you can. Anything "ISA" cannot be part of a tax return, or any other claim you might submit to HMRC.

typistretired

As of the 6 April 2004 ISA managers will no longer be able to claim back 10% tax deducted at the source of the dividend payment. This means that you will receive dividends in the ISA wrapper just as any one else who owns the shares.

However an ISA is still exempt from Capital Gains tax on any growth in the value of the shares themselves.

Another advantage is that income from Dividends in an ISA has the added advantage for higher rate taxpayers of only 10% deduction instead of 32.5%.

merlin777

Thanks for that, typistretired. I just wondered, if I was below the tax threshold, what would be an advantage to higher rate tax payers is a disadvantage to those under the lowest threshold and wondered if there was a way of not paying or getting it back?

RodC88

Hi,
My ISA stocks and share account is invested in unit trust funds. If I want to lock in the profit on the funds in my ISA account before the market drops, what would be the best strategy?

1. Sell the entire fund holding and wait for a price correction to reinvest;
2. Sell sufficient units to realise the profit portion and reinvest when the price is advantageous;
3. Do nothing and let it ride.

Thanks in advance.

aglester

Despite having a thorough look around all over the place I am still a little confused with regards to Investment ISAs as the new tax year looms large.

I currently have a Investment ISA with Cavendish Online filled with index tracker investments. This is a fund only ISA (i.e. I can't include individual shares).

I also have currently shares in a number of companies not inside an ISA (held through iWEB).

When next tax year comes round I am looking to have these shares moved into an ISA if possible. Obviously this would need me to open a new ISA (probably with iWEB).

Ideally I would like to maintain both accounts separately. Is this possible?

What is more, if they can be kept running together simultaneously next year would I still be able to contribute cash to both accounts or only the new one opened that year (i.e. the stocks and shares one)?

I hope this makes sense. Thanks for any help on this. Still rather bemused by this!