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ISA Myths

SA MYTHS ISAS, like most financial products, come WHAT ARE ISA MYTHS? with several rules and regulations which must be followed. Let us separate the myths from the truths to ensure you get the most out of your savings with your ISA. #1 I want to move my cash ISA to a stocks and shares ISA. Can I then open another cash ISA and start putting money in that in the same tax year? YES Yes you are able to do this, provided have not gone over your yearly allowance of £11,280. When transferring money from a cash ISA to a stocks and shares ISA, the cash ISA is treated as if you never had one. QUICK CHECK WHETHER THERE ARE ANY TIP PENALTIES FOR MOVING YOUR CASH ISA #2 Can I move my stocks and shares ISA into a cash ISA? NO No, you can only transfer your stocks and shares ISA to a different stocks and shares ISA with another provider, not to a cash ISA. QUICK YOU CAN MOVE YOUR CASH ISA TO A STOCKS & SHARES ISA TIP # 3 Can I use an ISA to back a mortgage? YES Yes. You may be able to use the earnings from an ISA investment to back a mortgage, but this should be discussed with your financial adviser or mortgage lender. QUICK IN SOME CASES ISAS TIP CAN WORK AS SECURITY # 4 Can I put a windfall or inherited shares in my ISA? NO No. You can only transfer shares you own into an ISA if they are from an employee share scheme. QUICK FIND OUT IF YOUR EMPLOYER TIP HAS A SHARE SCHEME #5 Can I get reports and accounts of the companies in my stocks and shares ISA? YES Yes, this can be requested via your ISA manager, although there might be a charge involved. You can also attend annual general meetings of the companies in which your ISA invests. QUICK KEEP UP TO DATE WITH YOUR TIP STOCKS AND SHARE ISA COMPANIES #6 If the interest earned on my ISA makes the balance higher than the full yearly allowance is the interest taxable? NO No, all interest earned on a cash ISA is tax-free. QUICK DUE TO ITS TAX-FREE STATUS, A CASH ISA TIP SHOULD BE YOUR FIRST PORT OF CALL #7 Is there any rule about how funds can be split across a cash ISA and a stocks and shares ISA? YES Yes - the maximum you can invest in an ISA in the 2012/13 tax year is £11,280 and this can be split in two ways. You can either invest the full £11,280 in stocks and shares, or invest half, £5,640, in a cash ISA and the other half in stocks and shares. QUICK IF YOU DON'T USE YOUR FULL ISA ALLOWANCE, IT CAN'T BE CARRIED TIP OVER TO THE NEX TAX YEAR #8 Can I still have an ISA if I go abroad? YES If you are a Crown Employee, such as a diplomat or a member of the armed forces, and are working overseas then you can open an ISA, as can your spouse or civil partner. If you have opened an ISA and then go abroad you cannot continue putting money into it unless you are a Crown Employee. However, you will continue to get tax relief on any money held in your ISA. QUICK ALWAYS CHECK HOW GOING ABROAD COULD AFFECT TIP YOUR FINANCES. THE GREAT BIG ISA MoneySupermarket com EVENT

ISA Myths

shared by KMilne on Mar 28
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Individual savings accounts – or ISAs as they have come to be known – have been with us now for some time, with people across the UK making use of these savings facilities to achieve both short an...

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