Clarification on Stocks and Shares ISA

Lokolo

1. no you have to be 16.

2. no. ISA. Individual Savings Account.

3. no. ISA. Individual Savings Account. They were owned by each person. You cannot transfer between each other. He can transfer the old ISA to a new ISA though, but using an ISA transfer form.

You can open a child trust fund or something. Have a looky here:

http://www.moneysavingexpert.com/savings/child-savings-tax-free

shucks

can I clarify - I get I can't create an isa in my son's name but can I create a new isa in my own name and still contribute to an isa I already own in the future ( I understand £3600 is the max to any isa in any financial year)

Thanks I'm just dim

dunstonh

shucks wrote: »

can I clarify - I get I can't create an isa in my son's name but can I create a new isa in my own name and still contribute to an isa I already own in the future ( I understand £3600 is the max to any isa in any financial year)

Thanks I'm just dim

You can add to your own ISAs (£7200 per year is the max). However, the money remains yours and is never earmarked for your son (can be important if you are doing it to use the gifting allowance to reduce IHT).

runciblespoon

dunstonh wrote: »

<dividends>
They will go into the cash fund held in the ISA if you say that is the option you want or they will pay out to your bank account if you choose that option. Money paid out cannot be reinvested without using your ISA allowance.

So let's say I buy 7200 units of ABC Equity Acc fund at £1 each in this year's ISA. In April 2009 I take out next year's ISA with £7200 in another broker. In May 2009 the ABC Equity fund pays a dividend of £5. The fund price happens to be £1 still. Since I've gone for the accumulation option I've asked to have the dividends reinvested. Will that cause me trouble because it means I'll be taking out a second 2009-10 ISA for the five units the fund will buy me? Or is it OK because it's handled by the fund and I don't do it myself?

dunstonh

runciblespoon wrote: »

So let's say I buy 7200 units of ABC Equity Acc fund at £1 each in this year's ISA. In April 2009 I take out next year's ISA with £7200 in another broker. In May 2009 the ABC Equity fund pays a dividend of £5. The fund price happens to be £1 still. Since I've gone for the accumulation option I've asked to have the dividends reinvested. Will that cause me trouble because it means I'll be taking out a second 2009-10 ISA for the five units the fund will buy me? Or is it OK because it's handled by the fund and I don't do it myself?

The acc fund doenst pay a dividend at any point. The income within the fund is built into the unit price. Take a look at the acc and inc versions of the fund and the acc units will be more expensive.

Even if you have inc units reinvested (which I tend to prefer as its cleaner) it doesnt use your ISA allowance up. Its your physical cash that goes towards the ISA allowance. Not interest of dividends that are paid.

Whatever happens to investment returns within the ISA it does not go towards your allowance.

RebTech

dunstonh wrote: »

...income funds and in particular low risk funds such as bonds and fixed interest funds benefit more from ISA status than growth funds.

This concerns me slightly. I'm worried that I'm not making the best use of my S&S ISA. I have about eight funds in it, of which all but one are accumulation units. That decision was simply on the basis that I want growth, not income. I'm putting in £600/month, and can easily change which funds that sum goes into, and/or I could sell some, which wouldn't be too expensive (I use H-L). Should I consider moving into these other types of funds from a tax point of view, leaving other issues aside?

dunstonh

RebTech wrote: »

This concerns me slightly. I'm worried that I'm not making the best use of my S&S ISA. I have about eight funds in it, of which all but one are accumulation units. That decision was simply on the basis that I want growth, not income. I'm putting in £600/month, and can easily change which funds that sum goes into, and/or I could sell some, which wouldn't be too expensive (I use H-L). Should I consider moving into these other types of funds from a tax point of view, leaving other issues aside?

Its not the inc/acc situation that matters that much at all. Its the tax position.

If you are investing using more than your ISA allowance then its often worth putting the fixed interest funds in the ISA as they can claim back the tax. Equity funds cannot. A higher rate tax payer should be putting their higher yielding funds in the ISA and the no/low yield funds keep outside the ISA (when investments exceed the ISA allowance).

Its just making sure that you get the most out of the tax wrapper. However, it only matters if you need to use unwrapped funds (i.e. not in an ISA).

greenface

i still have money in commercial property isa axa through co/funds as we have discussed before the money is locked in and this years report shows a loss which i expected. Here is the question can i move the s&s isa to a better and safer s&s isa even though it locked. Thanks for your replies

dunstonh

greenface wrote: »

i still have money in commercial property isa axa through co/funds as we have discussed before the money is locked in and this years report shows a loss which i expected. Here is the question can i move the s&s isa to a better and safer s&s isa even though it locked. Thanks for your replies

Cofunds are a great stocks and shares ISA provider. I have my own ISAs with them. You dont need to move provider just because you are unhappy with a certain fund. The whole point of fund supermarkets is that you have the 1000+ funds available to switch between without having to change the provider.

Whilst commercial property funds dropped a lot over the last 12 months, they have stabalised in recent months which just very small drops. Equity funds have now more or less matched commercial property funds in their drops so far. Many fixed interest funds now look attractive with high yields as they have had a poor run over the last few years.

The use of Cofunds usually means you have access to advice from an IFA. It may be worth you speaking to them.

wriggly

shucks wrote: »

I have been give £5000 for my new baby and I'd like to open a new isa to save some of it for him (I know it can't be in his name as he's a bit too young!) but I alreaday have a cash isa of my own from last year.

Why not open a children's bank account for him? Some pay very good interest (e.g. Principality BS) and if you fill in a form R85, there's no tax to pay. Since the money was given by someone other than the parents, there's no tax liability on the interest either.

So, you get an almost-ISA for your child in your child's name and can keep your ISA allowance for your own money.