2005 Account Isa Sources of 2005 account isa resources from the Web

Crown employees, such as diplomats or members of the armed forces, who are working overseas and paid by the Government are eligible to open an ISA. Their spouse can also open an ISA.

If you change your mind after the ‘cooling-off’ period, or in a case where there is no cancellation or cooling off period, the money you have invested will count towards your ISA annual subscription limit and your choice of a new ISA will be restricted to another ISA within the same component in that tax year. However, you could transfer the existing ISA to another ISA manager.

Some ISA managers will offer ISA products that give you a 'cooling off' or cancellation period (usually 7 or 14 days), in which you can change your mind about buying. Provided you cancel within the period set out by that ISA manager the payment made will not count as a subscription into an ISA in that tax year. If you change your mind within that time, you will be free to put money into an alternative ISA in the same tax year with the same or a different manager.

Can I put windfall or inherited shares in my ISA? No. You can only transfer shares you own into an ISA if they have come from an employee share scheme. Otherwise, the ISA manager must purchase shares on the open market.

You can transfer all of the money you put into your ISA in earlier years or only some of it, if you wish. However, some managers may not allow you to transfer part of your ISA (this will be in the terms and conditions). Your existing ISA manager will be able to tell you how much you can transfer.

If you give your child money to invest in an ISA account, and the total investment income arising on all gifts from you, not just in ISAs, exceeds £100 in any tax year, all the income arising will be treated as part of your income for that tax year for income tax purposes. You should report that income to your Inland Revenue office.
This rule does not prevent you from giving your child money to invest in an ISA - you just have to take care not to give your children too much. The £100 income limit for each child applies to each parent, not to both taken together.

Can I get reports and accounts of the companies in my stocks and shares ISA? Your ISA manager can arrange for you to receive reports and accounts, although there may be a charge. You may also be able to attend and vote at the annual meeting of companies in which your ISA invests.

ISA rules do not allow anyone to invest in two ISA investments with different managers if they fall in the same component. For example, you cannot have two Mini ISA stocks and shares components. If you want to continue to subscribe to both then from April 2005 you can only do so through a single ISA Manager. You can still invest as much as you did before, as the stocks and shares component investment limit has increased to £4,000.

An ISA life insurance policy will pay out on your death. Your personal representatives will have to claim the death benefit. There will be no tax to pay on income or capital gains that arise before the insurer accepts the claim. However, your personal representatives will be taxed on any interest that is paid if there is then a delay in paying out the claim. The insurer will deduct tax at the lower rate before paying over the interest.

Your ISA must be transferred directly between the two managers. You cannot transfer your ISA by closing it and opening a new ISA with the new ISA manager.

You cannot put money, for example, into both a Maxi ISA and a Mini ISA in the same tax year, or into two Mini cash ISAs.

You can only open an ISA if you are resident and ordinarily resident in the UK for tax purposes (ask your Inland Revenue office if you are in any doubt about this).

The insurer does not have to pay tax on income and capital gains on investments used to back your ISA life insurance policies. You do not have to pay any tax when the policy pays out.

Holding cash in the stocks and shares component.Cash may only be held in the stocks and shares component of ISAs to invest in qualifying stocks and shares. This includes cash subscriptions, interest and dividends, and proceeds from disposals of qualifying investments which have not yet been reinvested.