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A GUIDE TO

Making the right moves to build tax-efcient

wealth or your fnancial personality

INDIVIDUALSAVINGS

ACCOUNTS

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A guide to Individual Savings Accounts

Tie isuig outHave you ully used you 2012/13 ISA allowace?

In times like these, every penny counts. Interest rates are at historic lows and rising

ination can erode our buying power. But one way to mitigate these eects is to shield

savings rom tax by investing through an Individual Savings Account (ISA).

Ou ISA guide povides cocise ioatio

o how they wok, what to look o ad how

to ake the ost o you ISA allowace.

A exible wappe

A ISA is ot itsel a ivestet its

a exible wappe ude which a wide

age o ivestets ca be ade, ad the

poceeds ee o capital gais o icoe

tax. You ca choose o two types o ISA

Stocks & Shaes ISAs (shaes, bods ouds based o shaes o bods) ad Cash

ISAs. Stocks & Shaes ISAs ae also kow as

Equity ISAs.

You questios asweed

The 5 Apil ISA deadlie is ast appoachig

ad, i you dot ivest by the, you will lose

you 2012/13 tax yea ISA allowace oeve.

Hee ae aswes to soe o the ost

coo questios we get asked about ISAs.

Q. What is an ISA?

A. ISAs wee itoduced o 6 Apil 1999 by

the goveet to eplace Pesoal Equity

Plas (PEPs) ad Tax Exept Special Savigs

Accouts (TESSAs). With a ISA you ae

etitled to keep all that you eceive o that

ivestet ad ot pay ay tax o it. You ca

save up to 11,280 i the cuet 2012/13 tax

yea. A tax yea us o 6 Apil to 5 Apil i

the ollowig yea. The ISA schee povides

dieet ways o savig to eet peoples

dieet eeds. You ca pla o the shot teo put you oey away o uch loge.

Q. What are the dierent types o ISA?

A. Thee ae two types o ISA: Cash ISAs

ad Stocks & Shaes ISAs. I each tax yea

you ca put oey, up to cetai liits,

ito oe o each. Cash ISAs ay be suitable

o shot-te savigs, so that you ca get

at you oey easily.

Stocks & Shaes ISAs ay be appopiate

i you ca aod to leave you oey

utouched o loge tha, say, fve yeas.

Q. Can I have an ISA?

A.You have to be aged 16 o ove to ope

a Cash ISA, o 18 o ove to ope a Stocks& Shaes ISA. You also have to be esidet

ad odiaily esidet i the UK o tax

puposes, o a Cow eployee, such as a

diploat o a ebe o the aed oces,

who is wokig oveseas ad paid by the

goveet. The spouse, o civil pate, o

oe o these people ca also ope a ISA.

You caot hold a ISA joitly with, o o

behal o, ayoe else.

Q. How many ISAs can I have?

A. Thee is a liit to the ube o ISA

accouts you ca subscibe to each tax yea.You ca oly put oey ito oe Cash ISA

ad oe Stocks & Shaes ISA.

But, i dieet yeas, you could choose

to save with dieet aages. Thee ae

o liits o the ube o dieet ISAs

you ca hold ove tie.

Q. How much can I put into ISAs?

A. I the tax yea 2012/13, which eds o

5 Apil 2013, you ca put i up to 11,280

ito ISAs. Subject to this oveall liit, you

ca put up to 5,640 ito a Cash ISA adthe eaide o the 11,280 ito a Stocks

& Shaes ISA with eithe the sae o

aothe povide.

So, or example, you could put:

n 5,640 ito a Cash ISA ad 5,640 ito a

Stocks & Shaes ISA; o

n 3,000 ito a Cash ISA ad 8,280 ito a

Stocks & Shaes ISA; o

n othig ito a Cash ISA ad 11,280 ito

a Stocks & Shaes ISA

Q. What are the tax benefts o an ISA?

A. ISAs povide a tax-efciet shelte i

which you ca place a set aout o oeyeach yea. You pay o tax o ay o the

icoe you eceive o you ISA savigs

ad ivestets. This icludes divideds,

iteest ad bouses. UK divided icoe

has bee taxed at souce at the ate o 10 pe

cet ad this caot be eclaied by ayoe.

You also pay o tax o capital gais aisig

o you ISA ivestets (losses o ISA

ivestets caot be allowed o Capital

Gais Tax puposes agaist capital gais

outside you ISA). You ca take you oey

out at ay tie without losig tax elie. You

do ot have to declae icoe ad capitalgais o ISA savigs ad ivestets o

eve tell you tax ofce that you have a ISA.

Q: Can I transer an ISA?

A:You ca tase ISAs o oe

aage to aothe wheeve they wat.

You could tase:

n you cuet yea ISA subsciptios (ad

ay elated icoe) ad/o

n all o pat o you pevious yeas ISA

subsciptios (ad ay elated icoe)

I the ISA cotais cuet yea

subsciptios oly the etie accout ust

be taseed. Subsciptios to a Stocks &

DID YOU KnOW?

Te HM Revenue & Customs

gets an extra 500 million intax as a result of people not

making full use of their CashISA allowance.

Source: Nationwide

research, 2012

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A guide to Individual Savings Accounts

LET US HELP YOU mAKE THE rIGHT ISA CHOICE

This tax yea you ca shelte up to 11,280 o tax by ivestig i a

ISA. To discuss how we could help you save tax ad ake oe o you

ISA ivestets, please cotact us. Dot iss the 5 Apil deadlie to

beeft ully o this yeas ISA allowace.

WAYS YOU COULD USE YOUr ISA ALLOWAnCE

You ca ivest i Cuet ISA liit Cicustaces

Juio ISA up to 3,600 each tax yea You ca ivest ay

aout ito eithe a Cash

ISA o a Stocks & Shaes

ISA up to the Juio ISA liit.

Cash ISA up to 5,640 each tax yea You ca oly ivest hal o

you ISA allowace i a Cash

ISA.

Cash ISA ad Stocks up to 11,280 each tax yea You ca save up to 5,640

& Shaes ISAs i a Cash ISA ad the balace

i a Stocks & Shaes ISA.

Stocks & Shaes ISAs up to 11,280 each tax yea You ca ivest all o you ISA

allowace i a Stocks &

Shaes ISA.

Shaes ISA ca oly be taseed to

aothe Stocks & Shaes ISA. Howeve,

subsciptios to a Cash ISA ca be

taseed to aothe Cash ISA, o to a

Stocks & Shaes ISA.

Whee cuet yea subsciptios ae

beig taseed o a Cash ISA to a

Stocks & Shaes ISA, the cuet yea

subsciptios ae teated o all ISA

puposes as i they had bee ade to

the Stocks & Shaes ISA. This eas

that you ae egaded as eve havig

subscibed to the Cash ISA. Withi the

oveall subsciptio liit, theeoeyou ay subscibe to a Cash ISA late

i the cuet yea (with the sae o a

dieet aage) without beachig

the oe-ISA-o-each-type-a-tax-yea ule.

Q. Can I put money into an ISA or

my child?

A. Juio ISAs ae a popula way o

aily ad ieds to build up tax-

efciet savigs ad ivestets to

help with the cost o uivesity, povide

a deposit o a house o siply givechilde a stat i lie. Ay child esidet

i the UK qualifes who wast eligible

o a Child Tust Fud (CTF):

n Childe bo o o ate 3

Jauay 2011

n Childe (aged ude 18) bo o o

beoe 31 August 2002

n Childe bo o o betwee 1

Septebe 2002 ad 2 Jauay 2011

who did't qualiy o a Child Tust

Fud. most childe bo betwee

these dates did qualiy o a CTF

The cuet axiu allowace pe

child pe tax yea is 3,600 ad this will

icease to 3,720 o the 2013/14 tax

yea. The accout is held i the child's

ae ad a paet o guadia ca ope

ad aage the child's accout. Oce

a paet o guadia opes the accout

o thei child, ayoe, ied o aily,

is able to ake a cotibutio up to

the aual liit. no withdawals ae

peitted util the child eaches theage o 18, at which poit thei accout

is autoatically coveted ito a adult

ISA givig the ull access to thei

ivestets ad savigs.n

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Goldie media, Basepoit Iovatio Cete, 110 Buttefeld, Geat maligs, Luto, Bedodshie LU2 8DL

Articles are copyright protected by Goldmine Media Limited 2013. Unauthorised duplication or distribution is strictly forbidden.

UK divideds ad distibutios cay a 10 pe cet otioal tax cedit which caot be eclaied, whateve you pesoal

tax status. Past peoace is ot ecessaily a guide to the utue. The value o ivestets ad the icoe o the ca

all as well as ise as a esult o aket ad cuecy uctuatios ad you ay ot get back the aout oigially ivested. Tax

assuptios ae subject to statutoy chage ad the value o tax elie (i ay) will deped upo you idividual cicustaces.

Dont miss the5 April deadline to

beneft ully rom this

years ISA allowance.

Cotact us today.