ISA Matters 2009/2010

Thursday, March 5th, 2009 | Financial Digest

After a tough 2008, effective financial planning is more important than ever.

Why not start 2009 by taking full advantage of the tax breaks available to you? Whether your priority is capital preservation, or taking advantage of uncertainty in the markets, now is a good time to think about Individual Savings Accounts (ISAs). You can use your ISA to save cash or invest in stocks and shares. Save cash in an ISA and the interest will be tax freeInvest in shares or funds in an ISA – any capital growth will be tax free and there is no further tax to pay on any dividends you receive. Whatever your views on the market, we will be able to assist you in making the right investment decisions and ensure you make the most of the tax breaks open to you. ISAs are an important part of this as any income or capital gains are completely tax free.

Use it or lose it

The end of the tax year is fast approaching, which means there’s limited time left to use your ISA allowance for 2008/09. You can invest the whole ISA allowance of £7,200 in a Stocks and Shares ISA, or you can split it between a Cash ISA and a Stocks and Shares ISA – for example: £3,600 in a cash ISA and £3,600 in a Stocks and shares ISA. You can’t carry your allowance forward, so if you haven’t made the most of it now is the time to do so.

For the remainder of this tax year Lansdown Place are recommending a number of ISA options which are available to Investors via the Lansdown Place WRAP. This is a new facility that Lansdown Place are delighted to be able to offer to our clients, at its most simple it is a system for enabling you to hold all of your investments in one place, but yet diversifying your holdings between over 1600 collective investment funds. All the funds are available with discounted charges and the WRAP system has the added benefit of requiring minimal paperwork from you to establish your ISA account.

In order to assist you in making a decision of where to place this years ISA allowance I have highlighted some funds and options below, which I hope you will find of interest. We hope that this summary is of interest to you, if you would like to discuss making an ISA contribution in the current tax year then all we ask you to do is to get in touch with us, in order we can organise the investment for you and forward our essential paperwork for your signature and return.

Please note that the stated funds and ISA options below are not recommendations to you; all ISA contracts placed in the current tax year will be done after full consultation with our clients and one of our independent financial advisers

Cash	Owing to the recent market turbulence many investors are keeping money on deposit. The savings rates offered by the majority of institutions are sub-1%. Standard Life Bank are offering a Cash ISA with a current rate of 2.1%
Fixed Interest	The fixed interest market incorporating government gilts and corporate bonds in a range of listed companies is a popular home for new money being invested in the current economic climate. In this area there are the following funds: Templeton Global Bond Fund The fund’s investment include a portfolio of fixed and variable rate debt obligations of governments, government related or corporate bond issuers worldwide. Standard Life Investments AAA Rated Corporate Bond Fund – This fund invests solely in AAA rated corporate bonds
Absolute Return	Another area which has proved popular with investors is the absolute return investment strategy, this allows fund managers to invest up to 100% in cash if they feel equity markets will produce a negative return. The ethos of this type of investing is to produce a positive return for investors year on year, in this area there are the following funds: BlackRock UK Absolute Alpha Fund The fund invests primarily in a portfolio of equities and equity-related securities of UK Companies. It reserves the right to invest in cash and cash like holdings, to achieve a positive return from the portfolio. Octopus Total Return Fund This fund aims to achieve a positive return for investors through investment in UK equities. The fund is managed against a cash benchmark rather than any UK equity index, reflecting the aim to deliver a positive return in all stock market conditions.
Equity	Despite Stocks and Shares hitting the headlines for dramatic falls and volatility over the last year, they do represent an opportunity to invest whilst prices are suppressed. In view of this we are highlighting one traditional fund that has performed consistently over the long term. Invesco Perpetual High Income Fund This well established popular fund aims to achieve a high level of income together with capital growth. The fund invests primarily in companies listed in the UK.

Tags: Investments, ISA, isa allowance 2010, Savings, stock markets

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