ISAs

An ISA is simply a wrapper that allows the gains made within the fund to be free of tax.

The CASH ISA accounts are TAX FREE, and do not have to be entered onto any tax returns.

The cash allowance for 2012-13 is £5,640.

You can only open ONE new cash ISA per tax year and you can add new monies to one Cash ISA per tax year (see transfers). You do not have to open a Cash ISA with your existing provider, i.e. you can open an account at different providers every year.

Most providers allow for transfers in. And ALL should allow you to transfer out. Once you withdraw from a Cash ISA you cannot then re-deposit into.

The £5,640 limit refers to total deposited, and not maximum account balance. So if you deposit £5,640, and withdraw £1000, then you cannot re-deposit that £1000 in the same tax year as you have used up your £5,640 deposit limit.

The maximum investment level for Stocks and Shares ISAs is now  £11,2800 a year for anyone aged 18 or over. Deposit rules are as with cash ISAs.

Your maximum ISA allowance per year is £11,280.  This can be split as £5,640 into a Cash ISA and £5,640 into Stocks and Shares OR a full £11,280 into Stocks and Shares.

Within an ISA you can invest into most collective investments such as Unit Trusts/OEICs and Corporate Bonds. An ISA should be the first option for all investors.

Find out why so many people choose Worldwide Financial Planning as their Investment adviser by calling 0800 0112825 or complete the enquiry form in confidence.

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The value of shares and investments can go down as well as up

Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made