What can I invest in?
- Shares listed on recognised international exchanges, excluding
AIM and OFEX;
- Most unit trusts, Oeics, Exchange Traded Funds (ETFs),
investment trusts and UCITS (collective investment funds which can
be sold across national borders within the EU);
- Private sector corporate and European Economic Area (EEA)
government bonds with at least 5 years to maturity; and
- Cash balances for future investment.
Other ways to invest
Discretionary portfolio
management: your stockbroker makes the investment
decisions for you.
Advisory portfolio
management: your stockbroker makes recommendations but
seeks your approval before implementing investment decisions.
Execution-only: you invest
without any advice.
Online Self-Select ISAs
All online self-select ISAs are ‘execution-only,’ in that you make
your own investment decisions and the stockbroking service carries
out your instructions.
Most stockbrokers nowadays offer their own Self Select ISA,
but accounts differ considerably in the range of investments you
can trade in, dealing charges and account management fees.
What should I look out for?
- Certain self-select ISA accounts only offer investment in UK
shares, settled via CREST;
- Check whether you can invest in corporate bonds, gilts and unit
trusts/Oeics, as well as shares. A growing number of stockbrokers
allow investment in Exchange Traded Funds (ETFs), which are shares
which mirror certain indices and can sometimes be cheaper than
investing in index tracker funds.
- One of the great attractions of ISAs is the facility to hold
foreign shares, including International Retail Sales (IRS) stocks
which are foreign shares listed in sterling on the ExtraMark index
of the London Stock Exchange and settled in Crest.
Can I transfer shares I already own into a Self Select
ISA?
Shares you already own can only be
transferred directly into a self-select ISA providing they come
from:
- a profit-sharing scheme;
- a Save As You Earn (SAYE) approved s share option scheme;
In both cases, you
must transfer the shares into the ISA
within 90 days from the date of receipt of the shares or of
exercising the share option. The transfer is free of capital gains
tax.
The transfer-in of such shares will count as
part of your annual ISA allowance.
It is not possible to transfer other shares
directly into an ISA, unless you sell them first, and reinvest the
cash.
Dealing Charges
Dealing commission on shares is charged as a
flat fee per deal, or at a tiered percentage rate of the value of
the transaction. All deals are subject to stamp duty at 0.5 per
cent.
Investment funds, such as unit trusts and Oeics, carry
initial and annual management charges, although you may be able to
negotiate discounts if you deal through a discount broker or fund
supermarket.
Annual management charges
Some online self-select accounts charge fees to cover
administration costs for account opening, processing dividends,
corporate actions and managing nominee accounts.