| Each individual has an ISA (Individual Savings Account)
allowance of up to
£7000 which can be invested each tax year. This
allowance can be invested
fully into "stocks and shares" as a Maxi ISA,
or split into two separate
elements, i.e.: up to £4000 into a mini stocks
and shares ISA, up to £3000
into a mini cash ISA..
A mini cash ISA is a risk free, tax
free account which can be instant access but still pay
about 4% tax free interest currently.
These “investment” are usually made via
a Bank or Building society of your choice and if you
are saving for something shorter term this is an excellent
return so why not take advantage of it?
The Equity version of the ISA allowance
is often made via a Life Assurance company or an Investment
House and the important thing to bear in mind is the
much used phrase “the value of the plan is not
guaranteed and can go up and down depending on investment
performance”.
As a compliment to existing or indeed new Pension
arrangements the Isa allowance should not be overlooked
due to its extreme flexibility and accessibility.
- There is no specific investment or saving term,
they are open ended.
- Regular savings can usually be stopped or reduced
with no disadvantage.
- Within overall Government limits you can invest
additional amounts at any time.
- You can dictate the level of income or lump sum
withdrawals at any time.
Tax rules may change, the value of any tax relief
depends on the financial circumstance of the investor.
The value of an investment is not guaranteed and
can go up and down depending on investment performance.
You could get back less than you have paid in.
NOTE.
Equity ISA’s can be invested solely into “individual
shares” within an ISA wrapper or as part of a
“collective investment” where the core investment
is a Unit Trust, OEIC or Investment Trust.
Most Unit trusts are currently being converted to
Open Ended Investment Companies which are generally
referred to as OEIC’s.
Please be aware that these “guidance notes”
have been kept as short as possible and are meant purely
as an introduction to investments.
Harris & Associates would advise anyone considering
investing capital, as a single lump sum or on a regular
basis to seek professional and qualified advice.
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