ISA guidance - Intelligent Money Private Clients

[Intelligent Money]

There are 2 major types of ISAs – Stocks & Shares and Cash – with 3 further options in the Junior ISA (JISA), Lifetime ISA (LISA) Innovative Finance ISA.

Which ever option(s) you go for it is very important to remember an ISA is not actually an investment, it is a tax allowance (or ‘wrapper’) that insures any growth or income is completely tax free, as are any withdrawals.

Everyone over 18 gets this allowance every year on 6th of April and you have until the 5th April the following tax year to fill this. Any spare capacity at this point is then lost.

ISA’s are far more compelling than many give them credit for. Once your money is in an ISA it is out of the hands of HMRC (unless, of course, you have breached the rules) and they don not even need to be included on your tax return.

An ISA is a very flexible investment which provides access at any time (unless you have gone for a fixed term investment) with non minimum age required to withdraw or take income (with the exception of the LISA rules).

This thread is wholly related to answering any questions you may have about ISAs.

If your post is not related to ISAs, we have four other threads:

• General investments
• Pensions & SIPPs
• Tax (including IHT) Planning
• General financial guidance

Intelligent Money

[Intelligent Money]

mikyman said:

I am about to take a leap into the mysterious world of s&s and investments in general.
Having read all that i can regarding the services offered by Intelligent Money i am concerned to read that they only take clients with in excess of 100k to invest.
Whilst i will ultimatly have this amount, initially i want to start small and gain confidence without jumping straight in.

Hi mikyman

As Mr pointy has kindly pointed out, for PH members there is no minimum investment criteria and no initial charge. Just use the code PH2607. Feel free to drop me a message at [e-mail] if you need any help with anything.

Cheers

Nik

[Intelligent Money]

forest172 said:

If we say have £20k in last years pot and then we put another £20k in this years pot and the ISA gained say 10%, my wife likes the idea of taking that gain to treat herself.

So taking out say £2k would that come out forever or would you then be able to put back that £2k again this tax year?

Hi forest172

As long as the ISA is a FlexiISA (IM ISAs are Flexi) Then you can withdraw and repay as much as you like along as the withdrawal and repayment are in the same tax year.

So in your example above you have £44k in your ISA, £40k of contributions and 10% growth you can withdraw the whole £43,999 if you wish and then pay £43,999 back in as long as withdrawal and repayment are in the same tax year.

Cheers

Nik

[Intelligent Money]

rfisher said:

I have a flexible S&S ISA and an inflexible (if that's the correct term) S&S ISA.

If I try to do a partial transfer from the flexible to the inflexible account, will the inflexible provider try to take all of the flexible ISA?

If they will, is there a way to prevent them from doing that?

Thanks.

It is provider dependent as to wether they allow partial transfers and wether they receive partial transfers so there is no specific requirement or rule that says they must allow it, just a provision with the legislation that says they can. This applies to both Flexi and Standard ISAs

It will be detailed in the T&C of the account.

Nik

[Intelligent Money]

rfisher said:

Intelligent Money said:

It is provider dependent as to wether they allow partial transfers and wether they receive partial transfers so there is no specific requirement or rule that says they must allow it, just a provision with the legislation that says they can. This applies to both Flexi and Standard ISAs

It will be detailed in the T&C of the account.

Nik

Thanks Nik.

The standard ISA provider doesn't do partial transfers.

I assumed that they couldn't for standard ISAs.

Although I've used my £20k ISA allowance for this year, can I open a new flexi ISA and make the partial transfer that way?

From what I can see, providers won't let you open a S+S ISA if you've used your current tax year allowance.

You can open a new S&S ISA to accept transfers only but can not make any additional new contributions this tax year. The rule is that you can only contribute to one S&S ISA per tax year.

Unless I have misunderstood the example you have given, if the Standard ISA provider won't allow a partial transfer you could set a Flexi ISA up but you could only transfer the whole amount from the Standard ISA into the new Flexi ISA

Nik

[Intelligent Money]

Mark Benson said:

Hello,

My wife has a S&S LISA which we took out with Hargreaves & Lansdown, as she was days before her 40th bithday when they were launched and they were the only ones with a product up and running.
It's not large at the moment and I've been managing it myself but I find increasingly I don't have the time to do this - I think if I could devote more time to it or have it actively managed by someone we'd use it a bit more.

If possible I would like to move it to another, managed provider but neither of us qualify for the product so starting another from scratch is not possible. Can a LISA be moved if the holder is over 40?

I also have other investment advice I'll need shortly (reasonable inheritance I want to invest to help pay school fees, then use as income post-retirement) so I wondered if I could do a 'one stop shop' with IM....

Hi Mark,

You can transfer your LISA holdings to another LISA provider without losing the tax free benefits, As Coops has said we don't offer a LISA so we couldn't help with that part of your planning, Happy to help in other areas and chat through your planning needs at any point irrespective of wether IM investments are part of the solution for you or not.

Regards

Nik

[Intelligent Money]

Dan_1981 said:

I have a lump sum to invest <£10k & an ongoing monthly top up of a small amount (couple of hundred a month)

Would a stocks & shares ISA be a good solution for somethign like this?

At the moment it just sits in a bog standard high street account.

Happy to take a little amount of risk but don't want to dump the whole lot in Doge Coin.

Thanks!

Hi Dan_1981

The annual contribution allowance for a S&S ISA is £20k so you are well within the contributions limits. The tax advantages of the ISA wrapper and the flexibility of access are often attractive for this size of investment.

There are a number of providers and investment options available for a S&S ISA. If you want to chat through the areas that you may want to consider please just drop me a mail at [e-mail]

Cheers

Nik

[Intelligent Money]

alfa aficionado said:

I have an existing S&S ISA, to which I’m contributing monthly but will still be beneath the £20k annual ceiling. Can you add further funds to this, i.e. I’m purchasing a particular unit trust via this method - could I also then add a lump sum into a different unit trust or ETF to bring the annual investment up to the £20k limit?

I presume it would have to be through the same platform / provider?

Can you switch providers and still do the above?

HI Alfa

Apologies for the delay in replying.

You can only contribute to one S&S ISA per tax year. i.e. contribute to one provider/platform
You can hold any asset that the provider allows within that ISA so you can hold multiple unit trusts, ETF's, funds, shares etc within the ISA wrapper.

You can switch providers at any time but if you have contributed to a provider in a tax year and then transfer you cannot make additional contributions to the new provider until the next tax year.

Cheers

Nik

[Intelligent Money]

highpeakrider said:

I’ve got a IM ISA and also a Marcus cash ISA, maybe a daft question but once we get to April can I use both as long as I don’t exceed £20K in the year?

Hi highpeakrider

I'm not 100% what you are asking.

You can contribute to one S&S ISA and one Cash ISA in a tax year and the maximum combined contribution is £20k.

Hope that answers your question, if not please just let me know

Cheers

Nik

[Intelligent Money]

LordGrover said:

Perhaps a naive question...
Is it sensible to take money from a pension to invest in a stocks & shares ISA?

Hi LordGrover

Unfortunately this very much a "it depends" type situation. There are some circumstances where it may make sense, for example, drawing pension benefits in years of low income when tax on the drawings will be low and sheltering this in ISA's to draw down in later years when your income may be higher.

There are also reasons that you would not draw and re-invest, an example being if you draw the pension funds as income you may trigger MPPA and reduce the contributions that you can make to a pension in future years.

If you want to drop me a mail at [e-mail] with some more detail on what your situation I will be happy help where I can.

Cheers

Nik

[Intelligent Money]

drmike37 said:

A new question, if I may?

I have a Cash ISA to which I contributed in previous tax years. I transferred this ISA to a new provider on 6th April 2022 (and consolidated a couple of historical stragglers). I have not contributed anything beyond the transfers to this Cash ISA this year.

I also have a S&S ISA (with a different provider). I have contributed to this S&S ISA this year.

I have a >5yr horizon and can see that cash is depreciating fast at the moment. My spread is currently 10:4 cash:S&S.

Can I transfer *some* of my Cash ISA savings to my S&S ISA? Note I do not want to move it all. Would it make a difference if I had contributed to my Cash ISA this tax year?

The reason I ask is because the rules on gov.uk seem a little ambiguous to me.

Hi drmike37,

HMRC rules will allow you to transfer some or all of your cash ISA into your S&S ISA. This is treated as a transfer of funds that are already within the ISA wrapper so don't count as new contributions.

You would need to check that you current providers allow partial transfers out for your cash ISA and accept partial transfers in for your S&S one.

Cheers

Nik

[Intelligent Money]

CoopsIM said:

MrOrange said:

Quick question: What are the fees on this (PHE specifically), and how often are they deducted?

Good afternoon

The fee for PHE is 0.87% and it's accounted for daily in the valuations. It's taken on a monthly basis.

Kindest regards

Coops

For clarity 0.87% p.a.

Cheers

Nik

[Intelligent Money]

tighnamara said:

You can ( if I remember correctly) remove funds from an ISA and place back with no tax implications if carried out within the same tax year ie. 80K out / 80k in between April 6th - April 5th of the same tax year.

If you were looking to use funds from an ISA to reduce interest in an off set mortgage (for a period & not looking at market movement) could you remove £xxx and replace (cycle year on year) each tax year allowing you to keep the funds available to be fully invested tax free.

Taking away any market movement the aim would be to have this money as being available to keep invested tax free whilst still having a benefit of using as off set for a period of time before paying down mortgage with pension tax free funds.

Crux of it:

Use ISA money to keep mortgage down (off set) whilst remaining in a tax wrapper (move back and forth year on year)
Pay off mortgage via 25% tax free pension part
Re- Invest ISA money and still have available to build tax free during later years

I am probably missing something and its not a very bright idea

Hi Tighnamara

If we accept your “ignoring market movement” criteria then you haven’t missed anything.

It is the market movement against interest rate movement that will determine which is the most efficient place to hold the funds. Crystal ball time!

Cheers

Nik

[Intelligent Money]

Consigliere said:

If i understand it correctly I can have as many S&S ISAs as i like but can only pay into 1 S&S ISA per year.

If I deposited £1k into an S&S ISA in 2021/22 - if i then sell some original stocks (bought in 21/22) and re-invest in 22/23 (not putting any more funds in - just buying and selling with that initial deposit in 21/22) - does this count as paying into the S&S ISA therefore prohibiting me from opening another S&S ISA in 22/23?

Hi Consigliere

As long as the sale and purchase take place within the ISA i.e. funds aren't returned to your bank account as a withdrawal, then the trades are not treated as contributions.

Cheers

Nik

[Intelligent Money]

twokcc said:

Don't think about posting in this thread. Will pm Nick @ IM on money re my query on this thread re selling shares in an old S&S's ISA then transferring cash into a new cash ISA after I have already opened a cash ISA in this tax year

Link to thread

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by twokcc on Sunday 28th January 06:27

Hi twokcc

My e-mail is [e-mail]

For this tax year 23/24 you can only contribute to one S&S ISA and one Cash ISA per tax year, so if you have made contributions to a Cash ISA already this year you won't be able to open another one until April 6th 2024. Ironically from that point the new ISA rules will be in-place which will allow multiple ISA to be contributed to in a tax year.

Your current provide may have a money market option within the S&S ISA that may offer you an option that is similar to cash in the meantime.

Hope that helps

Cheers

Nik