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Can someone explain stocks & shares ISA's?
Energize
Posts: 509 Forumite
I've heard that some people have put money into some sort of stocks and shares ISA plans and got returns of something like 15% AER before tax. How much risk is involved in these, and who manages what the stocks and shares are invested in?
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Well, if the stocks and shares are held in an ISA, no further tax would be due.
AER is an interest rate measure, so it wouldn't apply to stocks and shares ISAs. Instead you would be looking at dividend payments (or equivalent) and capital growth. Within an ISA wrapper, no further income tax liability is present for dividends, and no capital gains tax is due on any profit you make from buying and selling within the ISA.
Apart from the tax advantages, the shares ISA is the same as a standard shares portfolio, so the person that manages it is ultimately the person whose money it is.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
just to that a bit further, a stocks and shares ISA is just a tax wrapper. A container for your investments. You dont make or lose money on a stocks and shares ISA. Your investments do that. You can put tens of thousands of different investments into the ISA (or pension or investment bond to name other tax wrappers).
The investments can range for low risk to very high risk and actually dont need to be stocks and shares (a better name would be investment ISA).
Experienced investors or those who use investment specialist advisers typically aim for double digit returns over the long run but there is no guarantee and you will get some years of much bigger returns and some years of losses. You have to average it out. The lower the risk of the portfolio generally the lower the potential for investment returns.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
What type of other investments can be made in an ISA other than stocks and shares?0
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Gilts, corporate bonds, unit trusts, OEICs, investment trusts and some other products I can't remember. You might also be able to drop in some structured products like guaranteed equity bonds, but most of those aren't worth it even if you can!I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0
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