Re: ISA reinvestment

Sep 24, 2005 1 Replies
E


I opened an ISA account last year and moved 7,000 pounds into it to buy >stock.


> After the stock purchase, a few pounds were left over and I got another > 100
> quid from dividends.
>
> Is the money already in the account counted towards the 7,000 annual > limit, or
> can I now move 7,000 pounds into the account and then buy 7,100 pounds > worth of
> stock for this year?
>

You can reinvest the dividend and spare cash at any time and you may subscribe another 7000 in this tax year in addition to your 7000 from the last tax year. Eric

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T

There is no limit, provided that you are intending to purchase shares some time in the future, when the time is ripe. It may be as well to point this out to your ISA provider.

You will also find that you get a low rate of interest on the cash, and the interest will be paid after tax has been deducted. This appears to be to encourage you to buy shares, rather than hold uninvested cash. You can buy fixed interest stock, like gilts, PIBS and corporate bonds, as well as shares, in a maxi-share ISA, but they must have at least 5 years to maturity at the date of purchase.

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