1. What is an ISA?
An Individual Savings Account (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.
2. 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
3. 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.
4. Can I open a joint ISA or as an Investment Club?
No, an ISA can only be opened on an individual basis, see below.
5. 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 the Inland Revenue.
6. If I have holdings on my ShareCrazy Trader 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 online, 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 ShareCrazy 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.
7. Can I transfer an existing ISA to ShareCrazy?
An existing Stocks and Shares ISA from the current tax year, or from a previous tax year can be transferred to the ShareCrazy Self Select Stocks and Shares ISA.
8. What do I need to consider when transferring a Stocks
and Shares ISA to ShareCrazy:
· Do I need to liquidate my holding (Part or Whole) with my present
ISA provider so that I can transfer the ISA to ShareCrazy
and to comply with their terms and conditions
· What will my present ISA provider charge me for transferring
our my ISA in cash or stock
· What will be my potential for loss of income or growth, following
a rise in the market, whilst my ISA transfer remains pending
9. 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 ShareCrazy.
·You may need to liquidate holdings in your existing ISA account before
it can be transferred to ShareCrazy 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.
10. What are ISA-eligible investments?
HMRC have set guidelines on which investments can be held
in an ISA account. For the stocks and shares component, these are generally
shares, which are officially listed on a recognised stock exchange such
as the London Stock Exchange (LSE).
The following are NOT ISA-eligible investments:
· Shares traded on the Alternative Investment Market (AIM)
· Warrants
In addition, ShareCrazy does not offer some investments such as Bonds,
Gilts and Unit Trusts and OEIC's, which would otherwise be eligible
to be held in an ISA. It is your responsibility to ensure that the investments
you choose qualify under HMRC regulations.
11. Can I buy Foreign Shares in an ISA?
From 13th December 2000 the ISA regulations changed to allow CREST Depository
Interests (CDI's) to be traded and held within an ISA. The LSE lists
CDI stocks. We trade CDI's in over 300 European and USA companies at
£9 a trade and this is available through the ShareCrazy Self-Select Stocks & Shares ISA .
12. How do I transfer an existing Stocks and Shares ISA?
Open an online ISA account by going to www.sharecrazy.com.
Existing customers can open the ISA by accepting the declaration and
authorisation of the ISA. New customers have to complete the application
form. If you pass the automated Money Laundering checks you will be
given a General Trading account number. Then you will have the opportunity
to open the ISA by accepting the declaration and authorisation of the
ISA.
Once the ISA has been opened, the customer can choose to 'Subscribe'
or 'Transfer' an existing ISA to ShareCrazy. Click on the 'Transfer
an ISA' button. A Transfer form appears. Compete this form with the
required information and print off. This allows us to contact your current
plan manager in order to initiate the transfer. Return the transfer
form Signed and dated to ShareCrazy Trader with a cheque made payable to 'HB Plc' totalling the
annual administration fee £60.
13. When does the tax year start and end?
The tax year runs from the 6th April one year to the 5th April the following
year.
14. If I open a Stocks & Shares ISA with ShareCrazy, can I open
another ISA with another Manager?
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
different ISA providers) per tax year, but your total subscription to all types of ISA must not exceed the overall limit of £7,200 per tax year. ShareCrazy however only offers a Self Select Stocks & Shares ISA and not a Cash ISA..
15. What are the charges?
ShareCrazy's commission for trading in an ISA account are exactly
the same as a ShareCrazy Trader online trading account - £9 per
trade. Please see 'Charges' for the full information. The Annual Management
Charge (AMC) is £60 paid on the commencement of the ISA and
on subsequent yearly anniversaries. The AMC does not change even if
you have more than one tax year's ISA with ShareCrazy. (ie, ISA
from tax year 03/04 transferred in and an ISA with ShareCrazy in 04/05).
16. 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 & 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. The Annual Management charge is non refundable.
17. Why invest in an ISA if you cannot reclaim the
10% tax credit on the Income received?
As of the 6 April 2004 ISA managers will no longer be able to 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%.
18. Do I need to declare dividends in an ISA account
on may tax return?
Income from ISAs do not need to be reported in your annual tax
returns. This will mean less time and trouble for those people completing
their returns.
19. Is tax charged on any interest on money in an ISA and do I pay Stamp Duty?
In a Stocks & 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.
20. What type of ISA does ShareCrazy offer?
ShareCrazy offers a Self-Select Stocks & Shares ISA. You are not allowed to subscribe to more than one Stocks & Shares ISA within the same tax year, but you can hold a Stocks & Shares ISA and a Cash ISA (with another ISA Manager) provided that the total subscription to all ISAs does not exceed £7,200 in any one tax year.
21. 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.
22. What is the minimum investment to open a ShareCrazy
Self-Select ISA?
There is no minimum investment for opening the ShareCrazy self-select
ISA.
23. How much can I invest in a Stocks & Shares ISA in each year?
The maximum that you can invest is £7,200. Please note that you
can only invest in one Stocks & Shares ISA in each tax year.
24. How long does it take to transfer my Stocks &
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.
25. How soon can I access and trade on my ISA account?
After you have opened your Online ISA account and sent in your subscription
or transfer form with you annual fee. Once the cheque has cleared you
may start trading with the available funds, or when your holdings have
transferred across to ShareCrazy from the other ISA Manager.
26. Can you give me Taxation Advice?
ShareCrazy offers an Execution-only service. For taxation advice please
see your accountant or professional adviser.
27. Can you give me Trading advice?
ShareCrazy offers an Execution-only service. No trading advice can be
given.
28. Is there a minimum length of time I have to hold
my ISA?
No. There is no minimum time you can hold an ISA.
29. 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.
Frequently Asked Questions: