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

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.

ISA cash, savings and investments must always remain in the same component. You cannot move funds from, say, a cash ISA with one manager to a stocks and shares ISA with another. A particular ISA may only allow certain types of savings or investments. For example, some collective investment scheme and life insurance products may fall into the cash ISA component so they can only be transferred into another cash ISA, but not all cash ISA providers sell insurance or investment products. If you are not sure what type of savings or investments you hold you should ask your ISA manager. If you want to include savings and investments that are not available for your ISA, you may have to transfer to another manager.

You can get an ISA by going to an ISA manager. These include banks, building societies, National Savings and Investments, some supermarkets and retailers, friendly societies, insurance companies, unit and investment trust companies, financial advisers, fund supermarkets and stockbrokers. Your ISA manager will look after your account for you.

You can transfer your ISA to another ISA manager whenever you want. You can usually transfer simply by asking the new ISA manager to arrange the transfer. Your existing ISA manager cannot stop you transferring, but they may make you pay a charge, or insist that you sell any existing ISA investments and transfer cash (this will be specified in the ISA manager’s terms and conditions). You may want to consider this when taking out an ISA.

If you have been putting money into the cash component of a Maxi ISA in the tax year in which you reach 18, you can go on doing so on and after your 18th birthday, subject to the normal limit. Once you have reached 18, you can also put money into the stocks and shares component of your Maxi ISA. As this is a Maxi ISA, you will not have to complete a new application.

The ISA manager may pay interest on this cash while it is held in the account. There is no income tax to pay on this interest, but the manager by law must deduct a flat rate 20% charge before crediting it to the account. You do not have to declare this interest on a tax return.

With stocks and shares or life insurance, you may not get back all the money you put in, particularly if you withdraw during the early years of an investment.

Can I use an ISA to back a mortgage? You can use the proceeds from ISA investments for any purpose, but you should discuss the implications with your financial adviser or mortgage lender.

I have been told that my policy will fall in the Mini cash ISA component. Can I continue paying into it and take out a separate £3,000 cash ISA?
No. Unless both are held with the same ISA manager, from April 2005 you cannot take out a separate Mini cash ISA whilst also continuing to pay into an insurance policy which falls in the cash component.
Even if the same ISA manager manages both products, the total that you may invest in the two products is restricted to £3,000.

If you are in an Inland Revenue approved all-employee share scheme run by your employer (that is, a savings related share option – 'Sharesave’ – or profit sharing scheme), or the new Share Incentive Plan then you can transfer any shares you get from that scheme into the stocks and shares component of an ISA without having to pay Capital Gains Tax, provided your ISA manager agrees to take them. The value of the shares at the date of transfer counts towards the annual limit. This means you can transfer up to £7,000 worth of shares in each tax year (assuming that you make no other subscriptions to ISAs, in those years).