ISA’s

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What is a NISA?

ISAs were reformed into a much simpler product in 2014, the NISA (New ISA). A NISA is a tax efficient investment account. Cash and a wide range of investments can be held in a NISA and there are no restrictions on withdrawals. You can invest up to £15,240 in the 2015/16 tax year and this allowance was increased from £15,000 the previous tax year.  What’s more, all existing ISAs have converted to a NISA.

Under current tax rules, you do not have to pay income tax on dividends received or capital gains tax (CGT) on returns from any investments in your NISA. You can put unit trusts, open-ended investment companies (OEICs), investment trusts, corporate bonds and government bonds in a stocks and shares NISA. You can also put individual shares in an NISA and these are known as self-select NISAs which are usually offered by stockbrokers.

What are the tax benefits of a NISA?

There is no further tax to pay on any dividends after the 10% tax credit has been deducted prior to the dividend being received. This also applies to higher rate tax payers. You won’t have to pay Capital Gains Tax on profits within your NISA.

What investment choices do I have?

A stocks and shares NISA allows you to invest in a wide range of sterling listed NISA eligible stocks and shares. Switching between your investments within your NISA is quick and simple. You can make the investments you want exactly when you want them. You should remember, however, that a NISA is not a risk free product, investments can go down as well as up and the value of your portfolio may end up being less than the initial sum invested. Tax benefits depend on your independent circumstances and may be subject to change.

You can invest in shares and corporate bonds issued by companies officially listed on a recognised stock exchange anywhere in the world. Gilt edged securities (gilts), issued by the UK government, similar securities issued by governments of other countries in the European Economic Area and ‘strips’ of all these securities. Units or shares in funds authorised by the Financial Conduct Authority (unit trusts or open-ended investment companies (OEICs)).

Can a NISA be transferred?

Previous years’ ISA funds can be transferred freely between cash and stocks and shares. If you wish to transfer NISA stocks and shares savings relating to any current year’s payments to a Cash NISA (i.e. amounts you have paid in after 6 April 2014), you must transfer these as a whole.

How can you invest in a NISA?

There is a limit on the amount that can be subscribed per tax year, and for the tax year 2015/16 the limit increased to £15,240. You can now save it all in cash, investments or a combination of both; you are allowed one of each per tax year. You cannot roll allowance over to the next year, however you do not need to open a new account, you can continue subscribing to the one you have and such subscriptions will count towards the allowance for the new tax year.

Risk Warning
All investments involve a degree of risk. The value of your investment can go down as well as up and you may not get back the money you invested. Cornhill focuses primarily on the provision of investments and services which are regarded as high risk. Investments in smaller companies and investments that are not readily realisable are considered high risk investments and you may have difficulty in selling them at a reasonable price and in some circumstances it may be difficult to sell at any price. Investments in high risk products should only be considered as suitable for high risk investors or as part of an overall balanced portfolio of investments. If you have any doubts about the suitability of an investment you should seek professional advice. Click for more info.