 |
| Are
you faced with the dilemma of how fully to utilise your Individual
Savings Account (ISA) allowance before the end of the 2003/04 tax
year? If so, then you don’t have too long to make up your
mind before the 5 April 2004 deadline! Here are some of the most
commonly asked questions we receive from our clients. |
| Q: What is the difference
between a Mini and a Maxi ISA? |
| A:
Each
tax year you can take out either one Maxi ISA or one each of the
three types of Mini ISA, the proceeds of which are tax-efficient.
The Maxi option permits you to invest the full £7,000 annual
allowance into stocks and shares, or £3,000 in cash, £1,000
in to life assurance and the remaining amount invested in to stocks
and shares up to the £7,000 allowance. These must all be with
the same company. With Mini ISAs, you are allowed to choose from
a cash Mini ISA (£3,000 maximum allowance); a stocks and shares
Mini ISA (£3,000 maximum allowance); and an insurance Mini
ISA (£1,000 maximum allowance). You can have one of each type
of Mini ISA each year, each with a different company, but you are
not permitted to take out a Mini and a Maxi ISA in the same tax
year. |
| Q:
Can my children have an ISA? |
| A:
This depends on their ages and on the type of ISA they want. Now,
anyone over the age of 16 is permitted to have a cash ISA for £3,000.
But you need to be 18 to have a Maxi ISA, which includes stocks
and shares and insurance, or a Mini stocks and shares or insurance
ISA. |
| Q:
Are ISAs good for providing an income? |
| A:
ISAs are ideal for generating an income that is also tax-efficient
- and you don’t even have to declare any payments you receive
on your annual tax return. |
| Q:
I want to select my own shares rather than using unit or investment
trusts. Can I do this in an ISA? |
| A: Yes, through
a self-select ISA. You simply decide upon an ISA wrapper and then
choose which shares or other permitted investments you want to buy
within it. |
 |
|
To
discuss your ISA options and to make an informed independent decision
before the end of the tax year, please e-mail or contact us.
Levels and bases of, and reliefs from, taxation are subject to
change. The values of these investments can fall as well as rise,
and you might not get back the full amount invested. Please note
that our comments do not constitute personal advice or a recommendation.
It is important to seek independent financial advice.
Article date 03/04
|
| |
|
