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| help index | smile invest products | stocks and shares ISA (funds) | stocks & shares ISA's explained Q. Why have a stocks and shares ISA to put my funds in? A. You don’t need to be a taxpayer to open an ISA but if you are you’ll benefit most as you get tax free gains. Q. What is a stocks and shares ISA? A. ISA stands for Individual Savings Account. ISAs are not investments in themselves, think of them as a tax-free ‘wrapper’ to put your investments in. ISAs replaced Personal Equity Plans (PEPs) and Tessas from 6 April 1999. Q. What is the yearly allowance for a stocks and shares ISA? A. Your overall annual ISA allowance is currently £10,200. All of this can be saved in a stocks and shares ISA. Alternatively, up to £5,100 of this allowance can be saved in a cash ISA, with the remainder saved in a stocks and shares ISA. For example, if you have £4000 in a cash ISA you can only save up to £6,200 in a stocks and shares ISA. These could both be with the same provider or each with different providers. Remember, you must not exceed your annual allowance each tax year. You can withdraw as much of the balance of your stocks and shares ISA as you like, without any interest penalties. The only thing you have to bear in mind is that if you do take any money out, you can't replace it. Q. If I buy a stocks and shares ISA, how will it affect my cash ISA? A. You can buy a new stocks and shares ISA if you already have a cash ISA. If you’ve already paid into your cash ISA this year, you must remember not to exceed your overall annual ISA allowance of £10,200. If you would prefer your full annual allowance in a stocks and shares ISA, but have already saved in a cash ISA, you are able to transfer your entire cash ISA balance to a stocks and shares ISA in the current tax year. This transfer must be the whole amount, and will still be included in your annual limit. Such a transfer will be treated as if it had been invested directly into a stocks and shares ISA in the current tax year. To create a transfer, you must fill out a Transfer Application form. The provider will then arrange the transfer for you. You must not withdraw the funds yourself as this will be a self transfer which is not allowed. Your savings would then lose their tax efficient status. Q. Can I top up my existing stocks and shares ISA in the Funds Supermarket? A. Yes if you are an existing Funds Supermarket customer you can do this easily online using the Account Management page. If you’ve not already reached this year’s limit for the stocks and shares component, you can buy funds and wrap them in your existing stocks and shares ISA. Q. How much do I have to put in to start my smile invest stocks and shares ISA? A. There is no minimum investment for opening a stocks and shares ISA. However, if you choose to invest in funds within a stocks and shares ISA ‘wrapper’ then most funds will set their own minimum amount that you are able to invest. This amount will vary from fund to fund. Q. Can I get at my money? A. Whenever you want - with no charges. Remember if you have a stocks and shares ISA you are only allowed to put in £10,200 per tax year (less any investment made into a cash ISA), regardless of how much you take out. For example, if you invest £6,200 then take out £500, you can only put in another £4,000. Q. How long must a stocks and shares ISA be open for? A. There are no minimum or maximum periods. However, as with any long term investment you shouldn’t consider investing for less than 5 years. Q. What happens at the end of the financial year? Can I continue with my stocks and shares ISA or do I have to start a new one? A. You can carry on paying into the one you have already chosen if you want to - it just rolls over to the next tax year. But if you pay into your existing stocks and shares ISA, it continues to be active and you can't open a new one. If you stop paying into the original stocks and shares ISA (before the new tax year starts) then you're allowed to start a different one. The interest or dividends will continue to accrue behind the scenes in your original stocks and shares ISA. Starting a new stocks and shares ISA each year with a different company can be quite an effective strategy as you're spreading your risk across a range of providers. Q. Do I need to include my stocks and shares ISA details on my tax return? A. No. All profits from your stocks and shares ISA are free of tax in your hands. Q. Can I open a smile invest stocks and shares ISA for someone else? A. No, not in the funds supermarket, but you can within our sharedealing service. Q. Can I have a joint stocks and shares ISA? A. No, not in the funds supermarket, but you can within our sharedealing service. Q. Who can take out a smile invest stocks and shares ISA? A. Anyone resident in the UK who hasn't already used up their allowance for this tax year and who is aged over 18 years. Q. I'm an overseas resident. Can I open a smile invest stocks and shares ISA? A. Sorry – our stocks and shares ISAs are only available to UK residents. Q. What do I need to get going with a smile invest stocks and shares ISA? A. Internet access via any web browser, we recommend you use the latest version. You need a minimum screen resolution of 800x600 - preferably 1024x768. We recommend you have an anti-virus program on your computer. Q. What if I need independent financial advice? A. If you would like independent financial advice, why don't you give The Co-operative Independent Financial Advisers a call on 0845 7896801, or e-mail smileinvest@smile.co.uk. Calls are charged at local rates and lines are open 8.30am - 4.30pm. Outside of these hours, you can leave a message and you'll get a call back asap. |
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