ISAs Stocks & Shares are an option for your savings which are tax efficient.
Uk Share Trading does not offer a comparison service or review for this type of investing product, but we have provided a very comprehensive list of providers who can help you below, where the information is provided by each brand and not by Uk-share-trading. All of the ISAs listed on the page below give you information and access to a huge range of investments, with many options graded based on the amount of risk involved. There are a variety of options where the funds track the performance of its stock market index which means your investment will fluctuate with rises and falls based on the the index values. Whichever option you choose, the manger decides the underlying investment decisions regarding the company shares, with no need for you to be involved.
Any investment taken in the stock market, whether it be managed on your behalf or by yourself, are a long-term investment proposition. Specialists recommend investing over a minimum of five years. If you feel you don't wish your money to be tied up for more than 5 years, or the risk that you could receive less money back than what you invest, then a safer savings account could be more appropriate, but todays interest rates are not currently very attractive, made even worst with the impact of Covid-19.
You must understand the risks involved.
Your investment value including your derived income can go down as well as up and you could end up with less money than you originally invested. There are many tax advantages in ISAs, however these can change at anytime in the future, which you will need to keep an eye on.
Stocks & Shares ISAs : Ordered A – Z
Futher ISA information
Annual ISA allowance
For year 2019 – 2020 tax year the limit of investment is £20,000 into an ISA. This limit can be an accumulation of investments in stocks, shares and cash or a combination of all three.
Total Range of assets
Stocks and shares ISAs offer a bigger potential for investment returns over a plain cash deposit, with a vast amount of assets, shares bonds and commodities to invest in, however they are a riskier proposition than a straight cash plan. The world is a volatile place, as seen clearly with the effects of Covid-19 and stock markets can crash for a number of reasons which are beyond our control.
Self selected ISAs
Many people decide on an ISA run by a manager with extensive experience, with some rather taking control over their own investment with a self-select ISA. These are only really suitable for persons with investing experience who are aware of the risks involved. Please do your reading up before deciding to go it alone!
The Tax shelter
Of course the huge perk of a stocks and shares ISA is, the shelter from capital gains tax (CGT). Normally you pay CGT on profits surplus of £12,000 per year when you sell your investment, however assets in ISAs are exempt from CG.
Currently the annual tax-free dividend allowance for taxpayers is now just £2,000 with dividend income higher than this allowance taxed at new, higher rates.
Meaning when your dividend income goes above £2,000, the tax you’ll pay will depend on which income tax band you’re currently in. You need to add the dividend income to your normal taxable income to work out what your tax band is. From this you will need to inform the HMRC so they can adjust your tax code accordingly. Finally if your dividend is higher than £10,000 you will need to file your own Self-Assessment tax return in each year.
Watch out for ISA charges
Be on the lookout for hidden charges when investing in stocks and shares ISAs. There are funds available that levy an initial fee of up to 5 percent, with an additional annual management charge of a further 1%, this is something to keep aware of, as it could wipe out your profits.
The Financial Services Compensation Scheme covers ISA investments up to £50,000 if the worst happens and your ISA manager goes bust. But be aware, the FSCS does not compensate for just poor performance. Cash ISAs are currently protected up to £85,000 by the FSCS.
We hope this read has been helpful, please take a look at our other informative articles, your feedback is always welcome.