ISA Changes - Frequently Asked Questions (FAQ)
- What are my ISA subscription options 2008/2009
- What happens to PEPs?
- What happens to existing ISAs?
- How much can I transfer from my Cash ISA to a Stocks and shares ISA?
- If I transfer all of the current tax year Cash ISA subscription to a Stocks and shares ISA, can I make any further payments to my Cash ISA later in the same tax year?
- How do I transfer the monies in a Cash ISA to a Stocks and shares ISA?
- Can I also transfer the monies held in a TOISA to a Stocks and shares ISA?
- Can I transfer the monies invested in a Stocks and shares ISA to a Cash ISA?
- Can I still transfer my existing Cash ISA to another Cash ISA with a different provider?
- Will the qualifying investments of the ISA be changed?
- Is there any changes to the taxation of my ISA?
- What funds shall I choose?
- How do I invest?
- What about my existing ISAs and PEPs?
- What if I need some help choosing the right funds for me?
Q. What are my ISA subscription options 2008/2009?
A. From 6 April 2008 customers are now able to invest in one Cash and one Stocks and shares ISA each tax year.
The annual ISA investment allowance has now risen to £7,200 per tax year. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in a Stocks and shares ISA with either the same or another provider.
Q. What happens to PEPs?
A. All PEP accounts will automatically become a Stocks and shares ISA.
Q. What happens to existing ISAs?
A. Mini Cash ISAs, TOISAs and the cash component of a maxi ISA are all reclassified as 'Cash ISAs'.
Mini Stocks and shares ISAs and the Stocks and shares component of a maxi ISA will be reclassified as 'Stocks and shares ISAs'.
Q. How much can I transfer from my Cash ISA to a Stocks and shares ISA?
A. You can transfer some or all of the money you have saved in previous tax years without affecting your current annual ISA investment allowance.
You are also able to transfer money saved in the current tax year. Such transfers must be the whole amount saved in that tax year in that Cash ISA up to the day of the transfer.
Q. If I transfer all of the current tax year Cash ISA subscription to a Stocks and shares ISA, can I make any further payments to my Cash ISA later in the same tax year?
A. Yes - provided you haven't already used up your annual ISA investment allowance of £7,200.
When you transfer your current year Cash ISA subscription to a Stocks and shares ISA it is as if that Cash ISA subscription had never existed. Any money you subscribed in the current tax year up to the date of transfer will be treated as if you had invested that money directly to the Stocks and shares ISA.
For example, if you had saved £2,000 in a Cash ISA during tax year 2008/09 and then transferred it to a Stocks and shares ISA later in that tax year you would be able to make further investments totalling £5,200 in the year. You can either invest all of the £5,200 in a Stocks and shares ISA or you could save up to £3,600 in a Cash ISA or a combination of both. Your initial Cash ISA would be closed and a new account should be opened.
Q. How do I transfer the monies in a Cash ISA to a Stocks and shares ISA?
A. Exactly the same way as you would transfer your ISA to another ISA manager at the moment.
You must not withdraw the money and invest it in your Stocks and shares ISA yourself, as it will count against your annual ISA investment allowance.
Q. Can I also transfer the monies held in a TOISA to a Stocks and shares ISA?
A. Yes you can. A TOISA is a Cash ISA.
Q. Can I transfer the monies invested in a Stocks and shares ISA to a Cash ISA?
A. No. The ISA rules have been changed to allow the transfer of monies saved in a Cash ISA to a Stocks and shares ISA but not vice versa.
Q. Can I still transfer my existing Cash ISA to another Cash ISA with a different provider?
A. Yes. The rules on transferring like-for-like ISAs between providers have not changed.
You must not withdraw the money and invest it in a Cash ISA yourself, as it will count against your annual ISA investment allowance.
Q. Will the qualifying investments of the ISA be changed?
A. No. The qualifying investments rules of the ISA have not changed, although as PEPs will be reclassified as Stocks and shares ISAs they will have a slightly wider range of qualifying investments available to them.
Q. Is there any changes to the taxation of my ISA?
A. No. ISA taxation stays the same, but any PEPs you hold will now fall into line with the ISA taxation rules. This states that if your Stocks and shares ISA holds cash for a period of time (pending investment) then under the ISA regime any interest earned on this cash will be subject to flat rate of 20% tax. This will be dealt with by your ISA administrator.
Q. What funds shall I choose?
A. Chartwell Direct and Investor Centre offer a huge range of funds for you to choose from, but we understand that narrowing down the field can be difficult and time consuming. To help our clients we’ve done the hard work for you by selecting a number of funds in a variety of sectors using a series of criteria and screening processes. We’ve called these our Funds in Focus.
Q. How do I invest?
A. Chartwell Direct and Investor Centre offer a huge range of funds that can be held within an ISA and discount the majority of the initial charges to our clients. If you take your ISA out via our Investor Centre service, holding your ISA on the Cofunds platform then we also provide Cashback on many funds. Cashback is where will share our ongoing commission with you. Find out more about our Cashback and Investor Centre service here or contact us for more information.
Q. What about my existing ISAs and PEPs?
A. You could save money on your investments every year with our Cashback service. Find out how to transfer your investments to Chartwell’s Investor Centre and start saving!
Q. What if I need some help choosing the right funds for me?
Chartwell Direct and The Investor Centre offer discount broking services designed for the confident investor who knows what product they want, and which company they want to invest with. We offer value to investors through our generous discounts and complimentary online services.
If you are unsure as to which product or fund you want to invest in you may benefit from financial advice. Chartwell Private Client is our impartial, professional financial advice service. We can arrange for one of our advisors to contact you and explain the service and the related costs before an appointment is arranged. If you would like further information please visit the Chartwell Private Client website or call 01225 448 732.