ISAs
Individual Savings Accounts (ISAs) were introduced by the Government in 1999 as a replacement tax-efficient wrapper for PEPs. On 6th April 2008, the ISA system changed, removing the previous mini / maxi distinction, whilst retaining the stocks and shares / cash distinction. On this date, PEPs also became ISAs and now follow the ISA rules. ISAs offer protection from capital gains tax and higher rate taxpayers enjoy a tax benefit of 25% on dividend income received. Annual subscriptions may be made to an ISA of up to £7,200 in 2008/09, of which up to £3,600 may be in cash.
Various changes to taxation since 1987 have eroded some of the attractions of ISAs. Nevertheless, for higher rate taxpayers in particular, ISAs represent an excellent opportunity to build up a pot of savings in a tax-efficient wrapper. With indexation and taper relief withdrawn, they offer further scope for CGT flexibility.
We view ISAs as an intrinsic part of portfolios. Although they must be kept separate from other investments for accounting and tax purposes we take full account of them when making recommendations or managing portfolios. We make a small annual management charge for ISAs to cover the costs of custody and reporting. Click here for more details.