Help and advice regarding Stocks and Shares Individual Savings Accounts (ISAs)


What is an ISA?

An Individual Savings Accounts (ISA) is a form of tax efficient shelter or ‘wrapper’ that replaced Personal Equity Plans (PEPs) and Tax Exempt Special Savings Accounts (TESSAs) in April 1999.

What are CAT Standards?

The government has introduced some standards for ISAs to help investors choose their investments. CAT stands for Cost, Access and Terms. There is no requirement for every ISA to meet the standards. Meeting the standards is not an indication that a particular investment will be good or bad, but simply that it has a certain level of charges and access, and a low minimum investment.

The stocks and shares component of the CAT standards has been devised more with managed funds and tracker funds rather than self select ISAs in mind. Therefore our ISA does not currently carry the CAT Mark. We believe, however, that our ISA will provide you with fair charges, easy access and fair terms.

CAT Standards are:

  • NOT a Government endorsement of a product
  • NOT a guarantee
  • NOT an indication of a superior product – a CAT Standard product may do better or worse than a non-CAT Standard product
  • NOT necessarily an indication of good investment performance – many of the best performing and most popular funds may not be to CAT Standard.
  • NOT a specific recommendation that a product is right for you
  • NOT a substitute for advice from a qualified adviser

Why do you need my National Insurance Number?

Her Majesty’s Revenue & Customs (HMRC) requires all ISA accounts that are opened for individuals to record the National Insurance Number along with other personal details, as they are a tax efficient savings product regulated by HMRC.

Can I open an ISA in joint names or for an Investment Club?

No, an ISA can only be opened on an individual basis, see below

Who is eligible for an ISA?

Only individual persons are eligible provided they are 18 years of age or older and a UK resident (excluding the Channel Islands and the Isle of Man) for tax purposes. You cannot hold an ISA jointly with, or on behalf of, anyone else.

For example, you cannot open an ISA with your spouse.

If you are uncertain as to whether you are entitled to open an ISA, you should consult HMRC.

If I have holdings on my dealing Account, can I transfer these into my ISA account?

The HMRC does not allow the direct transfer of existing holdings into an ISA account unless they are being transferred from another ISA account you hold.

Where shares are held outside an ISA the shares can be kept in the ISA Wrapper by:

Selling the shares, then:

Transferring the monies from the general cash account to the ISA Cash Account.

The shares can then be bought back in the ISA.

Please note that Beaufort Securities’ standard charges apply for processing the above and that you will be liable to pay stamp duty/SDRT on the shares bought back in the ISA account.

Can I transfer an existing ISA to Beaufort Securities?

An existing Stocks and Shares ISA from the current tax year, or from a previous tax year can be transferred to the Beaufort Securities Self Select Stocks and Shares ISA.

What will my present ISA provider charge me for transferring out my ISA in cash or stock?

You need to contact your existing provider and ask them direct

What will be my potential for loss of income or growth, following a rise in the market, whilst my ISA transfer remains pending?

Whilst your ISA is being transferred to us there can be a rise in the market which would not be reflected in your transfer value as this is taken at the date transferred and may take sometime to clear with us so that you can resume trading.

Before requesting an ISA transfer, you should be aware of the following:

  • Your existing ISA Manager may charge you for the transfer in terms of a Plan Closure charge and transferring Stock out to Beaufort.
  • You may need to liquidate holdings in your existing ISA account before it can be transferred to Beaufort due to stock eligibility (see ‘What are Eligible-Investments?’ below). The transfer process may take varying lengths of time to complete depending on the stocks held and any pending transactions.

What are ISA-eligible investments?

HMRC have set guidelines on which investments can be held in an ISA account.

For more specific advice about which investment instruments can be held within a Stocks & Shares ISA, please contact your Beaufort Securities broker.

How do I transfer an existing Stocks and Shares ISA?

Request an ISA Transfer Form from your Beaufort Securities broker or download one here.

Existing customers can open the ISA by accepting the declaration and authorisation of the ISA. New customers have to complete the application form.

Once the ISA has been opened, you can choose to Subscribe or Transfer an existing ISA to Beaufort Securities by downloading, printing and completing the relevant form here.

This allows us to contact your current plan manager in order to initiate the transfer.

Return the transfer form signed and dated to Beaufort Securities.

When does the tax year start and end?

The tax year runs from the 6th April to the 5th April each year.

If I open a Stocks and Shares ISA with Beaufort Securities, can I open another ISA elsewhere?

HMRC rules only allow individuals to have one Stocks & Shares ISA in any one-tax year. Therefore, if you subscribe to a Stocks & Shares ISA, you cannot have another Stocks & Shares ISA in the same tax year.

During the application process, you will be asked to declare that you will only have one Stocks & Shares ISA per tax year.

The responsibility lies with you.

You may have a Cash ISA (with a different ISA provider) per tax year, but your total subscription to all types of ISA must not exceed the overall ISA limit per tax year.

Beaufort Securities however only offers a Self Select Stocks & Shares ISA and not a Cash ISA.

What are the charges?

Beaufort Securities commission for trading in an ISA account are exactly the same as in our standard advisory account. Please see Charges for the full information.

Can an ISA be cancelled?

An ISA can be cancelled, or in HMRC terms made ‘void’, if there has been a breach of the ISA regulations. An example would be if an investor has subscribed to more than one Stocks and Shares ISA in the same tax year. In this case, the second ISA would be made void.

If the ISA is made ‘void’ or if you decide to cancel there may be shortfall in the amount of initial subscription returned if you have already invested your money.

Why invest in an ISA if you cannot reclaim the 10% tax credit on the Income received?

From 6 April 2004 ISA managers could no longer claim back 10% tax deducted at the source of the dividend payment.

This means that you will receive dividends in the ISA wrapper just as any one else who owns the shares. However an ISA is still exempt from Capital Gains tax on any growth in the value of the shares themselves.

Another advantage is that income from Dividends in an ISA has the added advantage for higher rate taxpayers of only 10% deduction instead of 32.5%

Do I need to declare dividends in an ISA account on my tax return?

Income from ISA does not need to be reported in your annual tax returns. This will mean less time and trouble for those people completing their returns.

Is tax charged on any interest on money in an ISA and do I pay Stamp Duty?

In a Stocks and Shares ISA, interest received on cash will be subject to a 20% tax. ISA accounts still attract stamp duty on purchases.

It is important to remember that tax rates and legislation may be subject to change.

What type of ISA does Beaufort Securities offer?

Beaufort Securities offers a Self Select Stocks & Shares ISA.

What does ‘Self Select’ mean

Self-select means that you make the investment decisions rather than a Fund Manager, as would be the case if you bought a Manager Fund like a Unit Trust or OEIC’s.

What is the minimum investment to open a Beaufort Securities Self-Select ISA?

There is no minimum investment for opening the Beaufort Securities Self-Select ISA.

How much can I invest in a Stocks and Shares ISA in each year?

The maximum that you can invest in the 2013/2014 Tax Year is £11,520.

Please note that you can only invest in one Stocks & Shares ISA in each tax year.

How long does it take to transfer my Stocks and Shares ISA to you?

The process is, to a large extent, dependent upon your current plan manager, whom we will contact as soon as we have received the transfer instruction from you.

We will make best endeavours to ensure that the transfer is completed within 30 days, which is considered industry best practice.

Please note that transfer times can fluctuate depending on the time of year and the plan manager involved.

How soon can I access and trade on my ISA account?

After you have opened your ISA account and sent in your subscription or transfer form. You may start trading as soon as you subscribe funds or when your holdings have transferred across to Beaufort Securities from the other ISA Manager.

Can you give me Taxation Advice?

For taxation advice please see your accountant or professional advisor.

Can you give me Trading advice?

When trading through your ISA account your brokers will be happy to assist you in reaching your financial goals.

Is there a minimum length of time I have to hold my ISA?

No. There is no minimum time you can hold an ISA.

How much will I be able to invest in subsequent tax years?

The Current subscription limit for the 2013/2014 Tax Year is £11,520.

Subscription limits may be subject to review at any time by the Treasury.

How long will the government run the ISA scheme?

The Government has announced that the ISA scheme will run indefinitely. However this, or any future Government can amend or change legislation at any time.