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Self-Select ISAs allow you to buy and sell shares but any capital gains are tax-free. In addition, there is no Income Tax liability on income received within an ISA with opportunities to select investments that pay interest gross.
There is no doubt that an ISA is one of the best places to 'house' your long-term investments and an excellent opportunity to build up a sizable portfolio as part of retirement planning or as a potential legacy for children and grandchildren - they really should not be overlooked!
The annual administration charge is £60 + VAT. For individuals opening an ISA account this would be due for payment in October 2014.
If you have ISA accounts held with other providers you can opt to transfer these accounts to Redmayne-Bentley with nothing additional to pay on your annual fee.*
* Your current provider may charge an exit fee.
Redmayne-Bentley received the award for 'Best ISA Provider 2012' at the City of London Wealth Management Awards for customer service, which are determined by public votes.
Holding cash in the stocks and shares component
HMRC states that cash may only be held in a stocks and shares ISA to invest in qualifying investments. This includes cash subscriptions, interest and dividends, and proceeds from disposals of qualifying investments that have not yet been reinvested.
2013/14 ISA limits
The current ISA allowance for a stocks and shares is £11,520. If you have already subscribed to a Cash ISA (up to £5,760) you can still invest the remainder in a Stocks and Shares ISA.
2014/15 ISA limits
The allowance for a stocks and shares ISA is increasing to £11,880 from 6th April 2014. You will be able to subscribe up to half of this (£5,940) to a Cash ISA and you can still invest the remainder in a Stocks and Shares ISA.
Cash ISAs can be transferred to a stocks and shares ISA enabling you to invest in a range of securities which may be beneficial in the current low interest rate environment.
We find that many of our clients don't believe they will be affected by Capital Gains Tax (CGT), thinking they will be covered by the annual allowance (£10,900 for 2013/14 tax year and £11,000 for 2014/15). Over time though, modest investments can grow into a sizable portfolio, and in selling their investments (e.g. to buy a property or perhaps pay for medical care), they can be liable to a hefty CGT bill. Holding investments like this within an ISA from the outset could save you thousands of pounds.
The government has launched a consultation into allowing a wider range of retail bonds to be held within an ISA. The report has revealed that the government is exploring the possibility of increasing the number of retail bonds eligible for stocks and shares ISAs by potentially reducing the requirement that such securities must have a remaining maturity above five years.
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Redmayne-Bentley have High Street branches throughout the UK. Find your nearest branch.