Subscriptions

An ISA is a tax efficient way to save. There are two main types of ISA available. One is known as a ‘cash ISA’ and the other is known as a ‘stocks and shares ISA’. It is possible to hold and subscribe to ISAs of both types at the same time, although you can only subscribe to one ISA of each type in any given tax year. This technical summary concentrates on stocks and shares ISAs. There are certain conditions that have to be met in order to be eligible to subscribe to a stocks and shares ISA. There are also limits on how much can be subscribed to a stocks and shares ISA in each tax year. It is also possible to subscribe to an ISA for a child via a Junior ISA. Eligibility An individual can pay a subscription to their stocks and shares ISA if they: • are aged 18 or over • are resident and ordinarily resident in the UK • have not subscribed to another stocks and shares ISA in the current tax year • have not exhausted the annual subscription limit Crown employees serving overseas, or those who are married to or in a civil partnership with a Crown employee, can make subscriptions to an ISA when they are not resident in the UK. Annual limit Subscriptions across all adult ISAs must not exceed the annual subscription limit for stocks and shares ISAs. This limit has been set at £11,880 for the 2014/15 tax year. The limit is increased each year, broadly in line with the September CPI figure, with the exact figure typically confirmed in the Chancellor’s Autumn Statement. It is possible to subscribe to a cash ISA and a stocks and shares ISA in the same tax year, but it is not permitted to subscribe to more than one stocks and shares ISA in any tax year. More than one stocks and shares ISA can be held at the same time, as long as subscriptions are not paid to more than one stocks and shares ISA in any tax year. HMRC has recently announced a number of circumstances in which payments made into an ISA will not be counted against the annual subscription limit. These include the following: • Defaulted cash account subscription – this allows investors who held cash in an ISA whose manager has been declared in default by the Financial Services Authority or Financial Services Compensation Scheme to make a single payment into a cash ISA equivalent to the amount held in their account immediately before the default. • Defaulted investment subscription – this allows investors who receive compensation outside their ISA in respect of an investment which defaulted inside their stocks and shares ISA to make a payment into their ISA up to the amount of compensation received by them. Similar payments can also be made in respect of certain Keydata and Lehman Brothers investments, although specific conditions apply. Further information is available upon request from your ISA administrator. Junior ISA A Junior ISA may be established for a child as long as the person establishing it has parental responsibility for the child and is aged 16 or over. Under current rules the child must not be eligible for a Child Trust Fund, and must be resident in the UK when the Junior ISA is opened. The Government is currently consulting on removing the restriction that prevents Junior ISAs from being opened for children who are eligible for a Child Trust Fund.  If the child leaves the UK after the Junior ISA is opened, subscriptions can continue to be paid to the Junior ISA, although ISA managers may impose their own limits. The annual subscription limit for a Junior ISA is £3,840 for the 2014/15 tax year. This limit will be increased broadly in line with CPI increases each tax year. There is no restriction on how much of the £3,840 is paid into a cash Junior ISA, and how much is paid into a stocks and shares Junior ISA. Subscriptions to both types of ISA can be made in the same tax year. A child may not hold more than one cash Junior ISA and one stocks and shares ISA at any given time. This differs from the position with adult ISAs, where there is no limit on the number of ISAs held of each type, but where only one ISA of each type can be subscribed to in a tax year. Any subscriptions paid to a Junior ISA on behalf of a child will be treated as a gift to the child.

Contents

• How ISAs work
• What can be included in your ISAs
• Junior ISAS
• Choosing and setting up your ISA
• Subscriptions
• Transfers
• Investments
• Withdrawals

Beaufort Sharedealing

Beaufort Sharedealing offers execution only sharedealing and investment services to private investors. Our aim is to provide you with a simple, straightforward stockbroking service which will allow you to buy and sell shares online, by telephone or with our award winning iPhone app by opening a Beaufort Sharedealing account, or in certificated form by sending us your order through the post. Our commitment to you is that we will provide these services with no pomp or fuss by giving you a clear pricing structure with no annual management fees and no hidden costs. We are an FCA authorised firm (FSA Number 485165) and are a subsidiary of Beaufort International Associates Limited, an FCA authorised firm (FSA Number 194083) who provide investment services including corporate finance to listed companies and a range of stockbroking services to private and institutional investors. MORE INFO If you would like to receive more information on the products and services offered by Beaufort Sharedealing please enter your email address in the box below and press GO.   Click here to go to Beaufort Sharedealing