What is an ISA?
An ISA or Individual Savings Account offers a tax efficient way to save money and invest. It is best to view an ISA as a tool to shelter your cash and investments from tax. No matter what rate of tax you pay, when you invest your money in an ISA, it is tax-efficient when compared to a normal investment account.
Each tax year the government sets an allowance that an individual is allowed to contribute to an ISA. All capital gains made and income received within the ISA are then tax free.
How much can I invest in an ISA?
The allowance for the 2020/21 tax year is £20,000. You can contribute up to this amount into either a Stocks & Shares ISA, Innovative Finance ISA, Lifetime ISA or Cash ISA. It is possible to split the allowance between the different types of account; however, you are only allowed to open one of each in a tax year. Netwealth offers a Stocks & Shares ISA.
ISA allowances don't roll over to the next tax year if unused. Therefore, it is important to use as much of your allowance as is possible each year.
Who is eligible to open a Stocks and Shares ISA?
To qualify for a Stocks & Shares ISA allowance you must be a UK tax resident over the age of 18. Under 18s are eligible for a JISA (or Junior Stocks & Shares ISA).
How are my investments taxed within an ISA?
Any gains made by selling investments within your Stocks and Shares ISA are not subject to capital gains tax and equally any losses made on your investments in your Stocks and Shares ISA cannot be used to offset capital gains made on other investments held in a taxable account.
Investments that pay interest (e.g. government and corporate bonds), or rental income (such as some property funds) provide 100% tax-free income if held within an ISA and therefore offer tax benefits for everyone.
Income can also come in the form of dividend payments. The way these payments are taxed was changed for the start of the tax year 2016/17 and they are now 100% tax free when held within an ISA wrapper.
How do I open an ISA with Netwealth?
The first step is to register with Netwealth and design your investment, selecting the risk level for your ISA portfolio. Once your ISA is created, our client service team will be in touch to confirm the next steps but this should normally be available to fund within 1 business day. You can make one-off payments as well as set up a monthly direct debit.
Where do you invest my ISA?
Your ISA is invested in one of our seven risk levels as chosen by you. You can split your ISA into different portfolios depending on your financial goals. Each of our risk level investment strategies are monitored and managed by our deeply experienced investment team.
How do I access and monitor my ISA holdings?
Our website and mobile app are available for you to view your holdings, transactions and the performance of your ISA investments.
Do you offer a service to top up my ISA from my General Investment Account?
Yes, we offer both one-off and annually recurring transfers from your General Investment accounts to your ISA and any JISAs. These can be set up and managed via the 'Tax Allowances and Services' section of your online account.
How can I see how much ISA allowance I have remaining?
The 'Tax Allowances and Services' section of your online account allows you to monitor your ISA and JISA allowances remaining during the tax year to ensure that you can maximise these before the end of the tax year.
Can I withdraw money from my ISA?
Yes, you are free to withdraw your money at any time; however please note that the Netwealth Stocks and Shares ISA is not a flexible ISA therefore if you are withdrawing money deposited in this tax year then your ISA allowance will remain used.
If you decide to transfer your ISA away from Netwealth to another provider then please do not withdraw the funds as they will contact us directly to arrange the transfer.
What happens to my ISA if I die?
The ISA stays open and remains tax-free until it is closed by your executor and passed on to your beneficiaries. If you have a spouse or civil partner, when you die they also inherit an additional ISA allowance up to:
- The value held in the ISA when you died
- The value of the ISA when it is closed
Therefore assuming the ISA passes to a spouse or civil partner it maintains its tax-free status.
Do you offer Lifetime ISAs (LISAs) or Help to Buy ISAs?
We do not currently.
What’s the minimum investment and which types of ISAs can I transfer?
The minimum investment to become a client of Netwealth is £50,000. This however can be made up of different account types as well as include both cash deposits and transfers from other providers. The minimum portfolio size for an ISA is £5,000 or £1,000 for a JISA. If you are unsure about meeting the minimums or have any questions, please set up a call with one of our client advisers.
You can transfer stocks and shares, cash and innovative finance ISAs held with other providers.
Find out more about transferring ISAs here.