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Guide to ISAs

Frequently asked questions about ISA's

FAQ ISAs What happens to existing ISA's if the policy holder emigrates?

It is possible to keep the ISA account in the UK even though the policy holder no longer resides here. The fund will continue to gain interest and will keep its tax free status. However, as the policy holder is no longer contributing to the UK tax system it is no longer possible to make any further contributions to the scheme.

FAQ ISAs What is the easiest way to compare ISA's?

When deciding on an ISA there are many factors which should be taken into consideration. Personal requirements such as how much are you wanting to invest, the time period and how readily available you would like your funds to be. When looking at what the returns are, it is best to look at the AER (Annual Equivalent Rate). This rate is shown as a percentage and states what the rate would be if the interest was to be calculated yearly.

FAQ ISAs What tax implications do ISA's incur?

ISA's are not charged capital gains tax or income tax. Higher tax payers who invest in the stock market would normally incur an additional 25% income tax on any dividends they receive, unlike standard tax payers who are exempt from paying tax on stocks and shares dividends. However when a higher tax payer invests in a stocks and shares ISA they too become exempt from income tax on their dividends. Stocks & Shares ISA's are exposed to stamp duty tax which is currently set at a rate of 0.5%, this is charged at the time of purchase. The tax benefits which are enjoyed with ISA's disappear once the policy owner is deceased and tax starts accumulating from the date of death.

FAQ ISAs Can any stocks and shares be purchased in a stocks and shares ISA?

All Stocks & Shares ISA's must contain stocks and/or shares purchased from the recognised stock market. There is an immense amount to choose from and your fund manager or financial adviser will be able to advise you accordingly.

FAQ ISAs I am a member of the armed forces and therefore leave the UK for long periods of time. Can I have an ISA?

To open and continue investing in an ISA you must be aged 16 years or over for a Cash ISA and aged 18 years or over for a Stocks & Shares ISA, as well as being a UK resident for tax purposes. However, an exception is made for those who are employed by The Crown or who serve the country overseas, although they still must fulfill the age criteria.

FAQ ISAs Is it possible to have an ISA in joint names?

Due to ISA accounts being tax free and having a maximum contribution per tax year per person, it is not possible to have an ISA in joint names. All ISA's must only have one policy owner.

PDF ISA Guide Download the ISA PDF Guide here - see our other free PDF guides here

Guide Contents

What is an ISA?
Different types of ISA's
Shopping around for the best ISA
Frequently asked questions about ISA's
Where to get further help and advice about ISA's

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