Self Select ISA Charges

Bitstring , from the wonderful person Geoff Lane said

? What tax do you think you are saving? Since there is no tax reclaim on dividends now, unless this is a bond investment (can still get the tax back on interest) you are saving no tax at all.

If he pays higher rate tax, he'll save tax on the dividends. Also potentially CGT.

Bitstring , from the wonderful person Andy Pandy said

Ain't gonna save any CGT on £2k though. Anyway, that's why I asked the Q .. maybe he is a HRT payer (in which case why doesn't he have about £50k in ISAs by now?).

"GSV Three Minds in a Can" wrote

How do you know that he doesn't already have capital gains elsewhere putting him over the CGT limit?

Bitstring , from the wonderful person Tim said

Again, I didn't 'KNOW' which is why I ASKED the question (which has yet to receive a response), However I'd cheerfully beta lot of money that someone with only 2k in an ISA is neither a HRT payer, nor has a CGT problem to bury. If they did they'd not be asking that sort of Question.

Right, I may be missing the point here but was under the impression self select mini ISAs were free of any tax on share investments.

I'm a normal tax payer and have a few other shares valued at about 3k elsewhere but when I bought some Sainsbury and Lloyds shares a couple of years back got the impression they would be better in a mini ISA.

Geoff Lane

Bitstring , from the wonderful person Geoff Lane said

No benefit at all unless you are a higher rate tax payer, or unless the shares are really bonds (or will be in the future) delivering interest rather than dividends, or unless you were in danger of paying CGT (now, or later). Maybe marginally less admin for you (and no company reports?) depending who does the ISA wrapper.

Personally I wouldn't bother, but then I wouldn't have (just) £2k in (just) two shares anyway.

The only advantage of an ISA for a basic rate tax payer is the absence of any capital gains tax (CGT) on profits and the fact that you do not have to mention the holdings on a tax return.

You used to be able to reclaim the tax on dividend tax credits.

Daytona

Possibly true, but they ever become an HRT, or get asked to do Self Assesment, then 25 quid p/a might be worthwhile.

Coincidently, 25 quid p/a is what Squaregain charge for *all* combined PEPs & ISAs - OK it's not such a good deal for 2K, but if you've got

rgds, Alan

There are a couple of other possible advantages for basic rate tax payers. Dividend income can reduce tax credits, but not when in an ISA. Also if he's over 65 dividend income could reduce his age related allowance, it wouldn't in an ISA.

Another stealth tax then.

Not yet over 65 but fast approaching.

Geoff Lane