How Changes to ISAs Could Help You Make Millions – Part 2 of 2
By Stephen Sutherland, author of Liquid Millionaire.Posted in the Category of ISAS, SIPPS, Investing, Stock Market, Investment Fund, Wealth Building on 2nd October, 2009.
Tags: isa, isa allowance, tax-free millions.
How Changes to ISA Allowances Could Help You Make Millions
On October 6th, the annual ISA allowance will increase from £7,200 to £10,200 for investors aged 50 or over this tax year. From April 6th 2010, this new allowance is extended to anyone aged 18 or over.
Together with last year’s new rules, this rounds off the most significant changes to ISAs since their introduction ten years ago.
All the benefits remain; within an ISA you pay no capital gains tax and no further tax on all the growth made. The new rules simply mean ISAs become more flexible and allow you to shelter more of your assets from tax than ever before.
In Part 1 of this series I told you why I welcome these changes and I began explaining how you can benefit from them too. Today I want explain in more detail how you can use ISAs to make tax-free millions.
Transferring from Cash to Stocks and Shares ISAs
Did you know that you can now transfer Cash ISAs into Stocks and Shares ISAs?
Yes, it’s true and your valuable tax wrapper will be preserved when you transfer. And with all your ISAs under one umbrella and instant access to your portfolio online, managing your ISAs could become so much easier.
It doesn’t matter where you originally bought your ISAs, in almost every case you can simply transfer them as they are, keep the investments you currently hold and preserve the ISA wrapper.
And if you did decide to one day sign up to become a premium client, you could then switch your investments into better performing ones.
Use the Safety of Cash when the Market Becomes Unhealthy
And the good news is that whenever the market becomes unhealthy, you’ll simply move all your ISA holdings into a cash based investment.
The best way to do this is to use something like the Fidelity ISA Cash Park. We use it for protecting our ISA and pension money in bear (down) markets.
Using the ISA Cash Park helps you to protect your portfolio and you still get to preserve the ISA wrapper. Yippee!
When people hear that it’s possible to get into the best funds (where the big money is flowing) in a bull (up) market and switch out of those investments into a cash based fund in a bear (down) market, they are both amazed and excited.
They say, “Why didn’t my adviser tell me I can do this?” and we reply, “Because your adviser isn’t a professional stock market investor.”
Many investors do not realise that they can change the investments they hold in their ISAs whilst preserving the ISA wrapper. This also goes for your pension too.
If you hold ISA investments that aren’t performing, or if your pension seems to be going nowhere, why not switch into something with greater potential?
ISA Rule Change Summary
March 2008
• Fidelity launches ISA Cash Park; a perfect way to protect your ISA and pension portfolio when markets are falling.
April 2008
• PEPs became Stocks and Shares ISAs.
• Maxi ISAs and Mini Stocks and Shares ISAs became Stocks & Shares ISAs.
• Mini Cash ISAs and TOISAs became Cash ISAs.
• You can transfer CASH ISAs to Stocks & Shares ISAs (but not vice versa).
• You can consolidate all your ISAs into one main Stocks and Shares ISA.
6th October 2009
• On the 6th of October the ISA allowance increases to £10,200 for investors aged 50 or over on 5th April 2010. This means even investors aged 49 will qualify, providing they turn 50 on or before 5th April 2010.
6th April 2010
• On the 6th of April 2010, the ISA allowance increases to £10,200 for all investors 18 and over.
Help Secure Your Financial Future
Your ISA and your pension are two great ways to help secure your financial future. If you’d like to know how our Retire Rich package could help you, with no obligation to buy or sign up for anything, please click here to contact a member of my team.
Your friend,
Stephen Sutherland
The UK’s Leading Authority in ISA Trend Investing and Author of Liquid Millionaire
Please Note: As always, let me remind you that I am not a financial adviser and therefore not authorised to give advice on what investments to buy or sell.
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