Newsletter

Page 1

: Autumn 2018

What is an ISA? An Individual Savings Account (ISA) is a tax­efficient 'wrapper' that provides a home for a number of different types of investment. The ISA wrapper ensures investors pay no tax on income or capital gains generated from the investments it contains. The ISA allowance for the 2018/19 tax year stands at £20,000 and savers can invest in cash, stocks and shares, or a combination of the two. ‘Junior ISAs’, with a current annual allowance of £4,260 are available for children under 18. A cash ISA can be used to access your choice of a range of deposit accounts, National Savings investments and/or certain qualifying cash funds. A stocks & shares ISA can be used to access a whole range of stock market and fixed income investments, including units or shares in collective funds. The kinds of investments that are eligible for inclusion in a stocks and shares ISA are numerous and include authorised unit trusts, investment trusts, open­ended investment companies (OEICs) and individual shares listed on recognised stock exchanges. They also encompass qualifying fixed income investments. Moreover, you can maintain a cash balance within a stocks and shares ISA without incurring a tax charge, although you are likely to receive a more competitive rate of interest within a specific cash ISA. ISA investors can transfer their ISAs between providers (subject to their provider’s rules) without forfeiting any of the tax benefits by completing a “transfer request” from their new provider.

Wells Financial is a financial advisory service, specialising in mortgages, insurance, pensions and investments.


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