1.
Owing to the fact that ISAs enjoy major tax advantages, the level of investment is restricted to £7,200 for the current tax year
2.
There are two basic types of ISA: Cash & Stocks and Shares.
- Stocks and Shares (which includes unit trusts, OEICs, investment trusts etc.) £7,200 maximum
- Cash £3,600 maximum
This will not affect ISA subscription limits if you have a PEP.
3.
From 06/04/08 PEPs are being discontinued and will automatically become a Stocks & Shares ISA.
4.
The £7,200 annual ISA limit for the current tax year allows up to £3,600 of that to be saved in a Cash ISA with one provider. The remainder of the £7,200 can be invested in Stocks and Shares ISA with a different provider. Alternatively using the Stocks & Shares ISA route, £7,200 may be invested solely in Stocks and Shares.
5.
Funds cannot be switched directly from PEPs to ISAs and there would in any case be little point in such a transaction, the tax treatment of PEPs and ISAs being largely identical.
6.
Investors have no personal liability to income tax or capital gains tax on income or gains arising from investments held within an ISA. Equally, capital losses cannot be used to offset capital gains realised elsewhere. No details of ISA investments, income received or gains realised need be included on your annual tax return.
7.
The rules for treatment of interest have changed. Although a Stocks & Shares ISA never hold cash the fund itself will sometimes earn interest on money held between one investment and another.
Under the new ISA tax regime any interest earned in this way will be charged 20% flat rate tax.
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Email
info@hartfinancial.co.uk