Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • sanfairyanne
    • By sanfairyanne 3rd Mar 18, 7:15 PM
    • 24Posts
    • 2Thanks
    sanfairyanne
    ISA for ageing parent is it worth it?
    • #1
    • 3rd Mar 18, 7:15 PM
    ISA for ageing parent is it worth it? 3rd Mar 18 at 7:15 PM
    Ever since inheriting shares my aging mother has done nothing with them. I discovered that she has stock valued around 250,000. I know her money will go to my niece and nephew, so this isn't about any personal greed. It occurred to me that as long as her investments never rise over the death duty threshold of 325,000 she really has no need to worry about trying to shelter stock under the ISA umbrella. Or am I wrong, upon her death when the stock is divided between my niece and nephew will they have to pay CGT on any profits my mother has made over the years?

    Many thanks in advance.
Page 2
    • IanManc
    • By IanManc 4th Mar 18, 3:09 PM
    • 542 Posts
    • 876 Thanks
    IanManc
    IanManc,

    I personally have a portfolio managed by a brokerage firm, at least half of my assets are out of the ISA umbrella. When I've had my accountant do my tax return there's never been a mention of income from Acc units. You have me worried now thinking my accountant is making an error.
    Originally posted by sanfairyanne
    I'm not having you worried - I'm only trying to explain what Bowlhead posted in posting #11 when you suggested that Acc unit retained income isn't subject to income tax. It is!

    Retained Acc income ought to be included in the tax statement/certificate that your "brokerage firm" issues each year. It probably is and you've not realised.
    • sanfairyanne
    • By sanfairyanne 4th Mar 18, 3:16 PM
    • 24 Posts
    • 2 Thanks
    sanfairyanne
    Thanks CapitalOne,

    It's easier said than done with old people. It's hard enough getting them to decide on the most basic things in life let alone adjusting their finances. The purpose of coming here has been to ask questions so that I can be better informed when I speak to them. Hopefully, I can make them see sense. I think your point about ISA's creating less record keeping is a winning point. When you're old you have a lot less patience for record keeping.
    • capital0ne
    • By capital0ne 4th Mar 18, 3:48 PM
    • 480 Posts
    • 237 Thanks
    capital0ne
    sanfairyanne,

    Tell me about it, I was trying to help a friend of mine sitting on a pile of money from his house sale 320k+

    This was three years ago now and it's still sitting in various bank accounts while he's spending 800/month renting.

    His excuse, he's going to buy, but can't find anything he and his wife likes!

    My suggestion was to put the money into NS&I Income bonds and atleast earn some interest.

    I alos suggested Santander 123 accounts when they were paying 3%, and the other accounts from Lloyds, TSB and so on.

    I even volunteered to help him do this.

    Three years later as I said earlier, nothings happend!

    So I sympathise - why is it so hard to convince people even when you offer to help?

    Good luck
    • eskbanker
    • By eskbanker 4th Mar 18, 4:40 PM
    • 7,166 Posts
    • 7,617 Thanks
    eskbanker
    She should put it into an ISA, she can move 40k into an ISA in the next few months, so do it now. And so should your dad. That will take care of 80k straightaway.

    Why do this, ignoring CGT, which doesn't come into this, its the tax payable and the tax return. In an ISA you can forget all about that headache, record keeping etc. I know it will take quite a few years to move 250,000 - 12 years or more, but at least you can reduce this to ten years right now.

    Just do it - and do it now!
    Originally posted by capital0ne
    Shifting unwrapped investments into ISA shelter is generally a good idea for the reasons you mention, but it's not true to say that CGT doesn't come into this - when selling 20K worth of stock to repurchase within the ISA under Bed & ISA, if that crystallises a gain of more than 11,300 (entirely possible if they're old shares) then the transaction becomes liable to CGT. So, OP needs to understand this when working out what to sell and in what quantity....
    • sanfairyanne
    • By sanfairyanne 4th Mar 18, 6:03 PM
    • 24 Posts
    • 2 Thanks
    sanfairyanne
    Shifting unwrapped investments into ISA shelter is generally a good idea for the reasons you mention, but it's not true to say that CGT doesn't come into this - when selling 20K worth of stock to repurchase within the ISA under Bed & ISA, if that crystallises a gain of more than 11,300 (entirely possible if they're old shares) then the transaction becomes liable to CGT. So, OP needs to understand this when working out what to sell and in what quantity....
    Originally posted by eskbanker
    Eskbanker, can you give me an example. Sorry to sound dumb, I just understand things better with examples. I'm guessing you mean that if for example, 10,000 worth of stock has risen to 25,000 there's a 15,000 profit which is liable to CGT. So 3,700 would be liable to CGT, a regular taxpayer would receive a bill of 370.

    Considering the confusion it's a wonder more people don't get in serious trouble with the taxman purely through lack of knowledge. Although I assume that if you use a good accountant the relevant information is held in the consolidated tax certificate?
    • eskbanker
    • By eskbanker 4th Mar 18, 6:11 PM
    • 7,166 Posts
    • 7,617 Thanks
    eskbanker
    Eskbanker, can you give me an example. Sorry to sound dumb, I just understand things better with examples. I'm guessing you mean that if for example, 10,000 worth of stock has risen to 25,000 there's a 15,000 profit which is liable to CGT. So 3,700 would be liable to CGT, a regular taxpayer would receive a bill of 370.
    Originally posted by sanfairyanne
    Yes, that's basically it, although in the context of selling in 20K chunks it would probably be more realistic to use a 20K sale price and an original 5K purchase price. However, another scenario that may or may not be relevant here is a lack of documentary evidence of the original purchase price, which would typically mean that the entire sale value is treated as a gain....

    Considering the confusion it's a wonder more people don't get in serious trouble with the taxman purely through lack of knowledge. Although I assume that if you use a good accountant the relevant information is held in the consolidated tax certificate?
    Originally posted by sanfairyanne
    At the risk of repeating, the tax certificate only covers the dividend income rather than anything to do with capital gains. And yes, a good accountant should be able to help, along with the esteemed members of this site as well of course!
    • sanfairyanne
    • By sanfairyanne 4th Mar 18, 6:26 PM
    • 24 Posts
    • 2 Thanks
    sanfairyanne
    Eskbanker,

    Many thanks, especially for clearing up that bit about the tax certificate. Regarding your comment on lack of documentary evidence relating to the purchase price of a stock. Thankfully with modern online brokerage companies, this info' is easy to find, but in the case of shares purchased on paper, I can see how important it is to be organized.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,040Posts Today

5,876Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin