ISAs (Individual Savings Accounts) encourage you to save in cash, stocks or shares by offering tax incentives.

You will often hear ISAs referred to as “tax wrappers” because they go around your savings, protecting you from paying certain taxes.

Tax Benefits:

Income Tax

• Monies held in the cash component of an ISA are entitled to a tax reclaim of 20%.
• Higher rate taxpayers are exempt from paying 32.5% tax on dividends from equity investments.
• Corporate bonds held in ISAs are entitled to receive a tax reclaim of 20% on fixed interest distributions.
• Interest paid on cash held temporarily in a stocks and shares ISA is taxed at 20%, but higher rate tax payers do not pay any more tax.

Capital Gains Tax

• All gains from any investments are free of Capital Gains Tax. However, losses cannot be offset against gains elsewhere.

The ISA manager either receives income gross, or reclaims tax from HM Revenue and Customs. You don’t have to do anything, you don’t even have to declare ISAs on your tax returns.

Types of ISA

There are two types of ISA, Cash ISAs and Stocks and Shares ISAs. In any tax year you can invest in either or both types.

• Cash ISAs: Includes bank and building society deposit accounts, National Savings and Investment products and investment or insurance products that aim to produce cash like returns.
• Stocks and Shares ISAs: Includes individual stocks and shares, unit trusts, open ended investment companies (OEICs) and investment trusts.

CommShare arranges unit trust/OEIC based Stocks and Shares ISAs. CommShare doesn’t arrange Cash ISAs or ISAs that allow you to invest in individual stocks and shares - often referred to as self-select ISAs.

ISA Limits

You can invest up to £7,200 each year in ISAs. You can invest lump sums or regularly, subject to minimum amounts that vary by company. The way your £7,200 allowance is divided up depends on the type of ISA you choose.

You can invest up to £3,600 in a Cash ISA and up to £7,200 in a Stocks and Shares ISA, subject to an overall limit of £7,200 in each tax year.

You can transfer some or all of your ISA cash to stocks and shares at any time, but not the other way round.

ISAs Simplified from 6 April 2008

• Maxi-ISAs and Mini ISAs cease to exist.
• Existing PEPs are re-designated Stocks and Shares ISAs.
• TOISAs are re-designated Cash ISAs.
• Cash ISAs can be transferred to Stocks and Shares ISAs.

Are you eligible?

You must be 16 or over (although until your 18th birthday you can only invest in cash ISAs).

You must be UK resident for tax purposes.

You cannot hold an ISA jointly, or hold one on behalf of anyone else.

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You can invest in new ISAs, transfer your existing ISAs from one plan manager to another and switch between funds.

You can use unit trust/OEIC funds from almost all the UK’s fund companies. That’s more than 1,000 funds to choose from.

Invest with well-known and highly respected fund companies like:

• Artemis
• Fidelity
• Invesco Perpetual
• Jupiter
• New Star
• Others like Aberdeen, Allianz Global, Axa Framlington, Credit Suisse, F & C, Gartmore, Henderson, J P Morgan, Legal & General, M&G, Neptune, Newton, Prudential, Standard Life, Threadneedle and many more….

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Save up to 5% instantly, that’s up to £360 on a £7,200 ISA.

When we arrange ISAs for you, we give up our initial commission and negotiate further discounts on your behalf. We aim to maximise the amount of money invested for you from the start.

The following are examples of savings we offer with popular fund companies when you invest £7,200 as a lump sum in a Stocks and Shares ISA:

These savings are not available if you invest directly with fund companies.

Company	Normal Initial Charge	Initial Charge through CommShare		You Save Up to:
		Using Fund Manager	Using Cofunds
Aberdeen	4.25%	0.25%	0.25%	4%	£288
Allianz Global	3%	0%	0%	3%	£216
Artemis	5.25%	0.5%	0.5%	4.75%	£342
AXA Framlington	5.25%	1.25%	1%	4%	£288
Credit Suisse	5.25%	1.25%	1.25%	4%	£288
Fidelity	3.5%	0.5%	0.5%	3%	£216
F & C	5%	1%	1%	4%	£288
Gartmore	5%	0.25%	0.25%	4.75%	£342
Henderson 'A'	5%	2%	0.5%	4.5%	£324
Invesco Perpetual	5%	0%	0%	5%	£360
Jupiter	5.25%	0.25%	0.25%	5%	£360
Neptune	5%	0%	0%	5%	£360
New Star	5.25%	0.5%	0.5%	4.75%	£342
Newton	4%	0%	0%	4%	£288
Rathbone	5.5%	1%	1%	4.5%	£324
Threadneedle	3.75%	0.75%	0.75%	3%	£216

These are typical savings for these companies, but do not apply to all funds. You can check discounts for all funds, including those applicable to regular savings, and investments arranged through Cofunds and Fidelity FundsNetwork fund supermarkets here.

Get cashback every year on new and your existing ISAs.

You benefit from annual cashbacks - your share of any renewal commission paid to us. We receive it on most Unit Trust and OEIC funds held in ISAs and other investments too.

You don’t have to invest in a new ISA to benefit from annual cashbacks. If you already have Unit Trust or OEIC ISAs it’s easy to arrange. Just appoint us as your Agent.

How much of the renewal commission we share with you depends on the value of your investments. The more investments you have with us – the more you benefit.

Renewal commission we receive	Your Share (%)	Your Share (£)
Up to £100	30%	Up to £30
Between £100 and £250	40%	Between £40 and £100
£250 or more	50%	No limit

This table shows what that could mean for you:

Current value of your investments	Expected total value of annual cashbacks
	5 years	10 years	15 years
£10,000	£90	£200	£450
£25,000	£300	£700	£1,500
£50,000	£750	£1,800	£3,250
£100,000	£1,500	£3,600	£6,500

This is just a guide. You don’t need a minimum of £10,000 in your portfolio to benefit and you could enjoy greater cashbacks if your portfolio is more than £100,000. These amounts are not guaranteed and are based on 0.5% renewal commission each year and fund growth of 7% each year.

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Your ƒUNDSFOLIO information includes:

• A consolidated valuation of funds we’ve arranged for you, or where you have appointed us as your agent.*
• Fund performance information*

*Includes funds from 30 fund companies, Cofunds and Fidelity FundsNetwork. Any missing funds can easily be added to your ƒUNDSFOLIO online.

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Invest online or by paper application

You can invest in an ISA online using Cofunds fund supermarket through this website, or using Fidelity’s FundsNetwork fund supermarket through Fidelity’s website. Alternatively, we can send you brochures and application forms for you to invest by paper application using your chosen fund company. If you want, you can invest in an ISA by paper application using either fund supermarket as well. Simply request a Cofunds or a Fidelity FundsNetwork application pack.

Fund companies or fund supermarkets

You can invest in an ISA using Cofunds or Fidelity FundsNetwork fund supermarkets, or invest using the fund company of your choice.

Lump sum or regular savings

You can invest, up to your ISA allowance, in one lump sum payment, or a series of lump sum or regular monthly payments. Investments are subject to minimum amounts, which vary by fund company.

If you intend to invest using monthly savings, we recommend Cofunds fund supermarket because initial discounts are never worse and usually better than those available if you invest using the fund company.

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A typical fund has an initial charge of 5% and an annual charge of 1.5%, of which 3% and 0.5% respectively are earmarked to pay for financial advice.

3% up-front (initial commission) and 0.5% each year (renewal commission) might not sound much, but for every £10,000 you invest, it amounts to £800 over 10 years – a substantial portion of your money.

If you want financial advice you might be happy with this arrangement. But what if you choose and manage your own funds? Don’t you pay lower charges? You might think so, but in most cases you don’t.

This is because the fund companies keep the money they would otherwise pay to financial advisers.

Do you think that’s unfair? We do. If you choose and manage your own investments we think you should pay much lower charges.

In fact, we can save you as much as £750 on that same £10,000 investment over 10 years.

That’s the idea behind CommShare.

You choose your investments and we arrange them. The companies pay us commission – then we share it with you.

Your share results in discounted charges when you invest, or cashback, or both.

Assumptions: A 4.5% discount applies to new investments, funds grow at 7% each year and the fund companies pay 0.5% renewal commission each year. (The amounts shown in this example are not guaranteed. They could be more or less than the amounts quoted).

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