What is an ISA?
An ISA is a tax free savings account. Unlike normal savings accounts, tax will not be deducted from your interest. This is not the case with a standard Newcastle Building Society savings account (unless of course you are a non tax payer).
You can only invest a set amount each tax year.
Why should I take out an ISA?
Everyone in the UK is given a tax free savings allowance each year. In order to take advantage of this you must take out an ISA. You can earn more savings interest with an ISA because you won't pay tax.
Who can provide an ISA?
ISAs can only be provided by authorised ISA Managers. Newcastle Building Society has obtained the relevant authorisation and we offer a range of cash ISAs. As an ISA Manager, Newcastle Building Society is responsible for ensuring your ISA complies with, and is operated in accordance with, the Terms and Conditions specified by HM Revenue and Customs.
In the case of stocks and shares ISAs, we will refer you to Newcastle Financial Services Ltd (NFSL) who are authorised to advise you on a range of stocks and shares ISAs.
How many types of ISA are available and how much can I invest in each?
The government announced in the 2014 Budget that from 1 July 2014, the overall ISA limit for 2014-15 will be £15,000.
The new allowance offers you the option to save your whole allowance of £15,000 in cash, stocks and shares, or any combination of the two
For example, you could choose to invest:
Stocks and Shares ISAs
For the 2014/2015 tax year the overall ISA allowance is £15,000.
For the 2014/2015 tax year the ISA allowance is £15,000.
Can I open both a stocks and shares ISA and a cash ISA?
Yes, as long as you do not exceed the £15,000 tax free savings limit. You cannot subscribe to more than one cash ISA or more than one stocks and shares ISA in the same tax year.
Can I transfer my ISA savings?
You are able to open one cash ISA and one stocks and shares ISA each tax year. However, once open, you can transfer your cash or stocks and shares ISA between providers as many times as you wish. This applies to amounts that you have paid in since 6 April 2014 as well as amounts that you have paid in during previous tax years.
If you wish to transfer an ISA to the Newcastle Building Society you can do by contacting us on 0345 734 4345, visiting your local branch , or if you are opening a new account online you can enter the details of your existing ISA during the application process. Once we have received your transfer details we’ll contact your current provider to organise the transfer, this can take up to 15 days to complete.
How do I transfer savings from my Stocks and Shares ISA to a Cash ISA with the Newcastle?
You will need to complete a Customer Acceptance Stocks and Shares to Cash ISA Transfer Authority Form from the Newcastle. You can do this by clicking here. The form will need to be returned to the Newcastle, who will contact the manager of your stocks and shares account to arrange the transfer. You should not withdraw sums from your stocks and shares account yourself in order to deposit it into a cash ISA. Any amount that you pay in may count as a fresh payment against your overall limit of £15,000.
Once the stocks and shares ISA subscriptions reach the Newcastle, they will become Cash subscriptions.
Who can tell me about ISAs?
ISA Managers will give you details of the ISAs they offer and some may be able to provide advice. Any of the Newcastle's staff will be able to explain our products. If you wish to invest in more than one of the ISA components then an independent financial adviser can help in choosing the right option for you.
How much do I have to invest in my ISA?
You can save as little as you like in a Newcastle Building Society cash ISA. The initial investment amount may vary depending upon which ISA you choose. During the current tax year, the maximum amount you can save in a cash ISA is £15,000. Limits are subject to legislation which may change in the future.
Can I open an ISA?
To open a stocks and shares ISA you have to be aged 18 or over, however you can open a cash ISA from the age of 16. You also have to be a resident of the United Kingdom and in most cases you will be required to be living in the UK. It is important that you ask your Tax Office if you are in any doubt about your residential status.
If you are a crown employee, such as a diplomat or a member of the armed forces, who is working overseas and paid by the government then you are eligible to open an ISA.
You cannot open an ISA if you are a non UK resident.
Can I open a joint ISA?
No, you cannot hold an ISA jointly with or on behalf of anyone else.
What are Stakeholder Standards?
The Stakeholder Standard for products is designed to give investors greater clarity about the range of products available. It was thought that many investors were put off investing by the complexity of the market and the nature of the regulatory system. Stakeholder products are designed to address these concerns.
There are certain criteria which must be met to allow an ISA to be classed as a Stakeholder product.
- The minimum amount the account holder can deposit on a single occasion is £10
- We accept payment to the account by a number of means including cash, cheque and standing orders
- Interest accrues on a daily basis at a rate not more than 1% below the Bank of England base rate
- We must pay any cash or interest held in the account to the holder within 7 days on receipt of an instruction from the account holder
- No limit to amount of withdrawals customer can request.
Do I have to invest with the same ISA Manager each year?
No. There is no requirement to use the same ISA Manager each year. Providing you only subscribe to one ISA component in each tax year you are able to open an ISA each tax year with a different institution. For example you could open a cash ISA with your bank in one tax year and open a cash ISA with Newcastle Building Society in another tax year.
What period does the tax year cover?
The tax year runs from 6th April to 5th April the following year.
What happens if I pay into too many ISAs?
HM Revenue and Customs will monitor ISA returns provided by all financial institutions to ensure the one ISA per tax year rule is strictly enforced.
ISA customer acceptance forms contain a declaration that you will not invest into another ISA of the same component within a given tax year. If you do mistakenly invest within two ISAs in any given tax year then the matter will be handled by HM Revenue and Customs. As a general rule one of the ISAs will have to be 'voided', and no tax free benefit will be derived as a result of opening the second ISA.
What happens if I'm physically unable to sign the forms?
An application by someone holding a lasting Power of Attorney may be accepted where the investor is physically incapable of making the application. Under these circumstances the Society would require:
- The Power of Attorney
- A written declaration from the attorney confirming that the investor is physically incapable of making the application. This should be attached to the application form as HM Revenue and Customs may require sight of this declaration.
Can I invest funds on behalf of someone who is mentally incapable of handling their own affairs?
The Society can accept applications made by either:
- An attorney appointed for a person who is mentally incapacitated (The Enduring Power of Attorney should have been registered by the Court of Protection, or stamped by the Public Trust Office).
- A receiver appointed by the Court of Protection for someone who is mentally incapacitated. (the document of appointment must be produced).
What is a Junior Cash ISA?
If you're the parent or carer of young children, it may seem a long way off until they fly the nest - and at the Newcastle we're sure that you’ll want to give them as much help as possible when that time comes.
That’s where our Junior Cash ISAs come in.
Junior ISAs were introduced late 2011 and are available to any child who was not eligible for a Child Trust Fund. You can use them to build a nest-egg for your children which will be given to them once they turn 18.
You may already be saving for your children’s future, but if the amount a parent invests means that the child receives more than £100 interest a year, then this interest begins to attract income tax! With a Junior Cash ISA, all the interest earned is tax-free – meaning more for the little one when they’re a not-so-little one!
To help you make the most of the £4,000 Junior ISA allowance each child has each year, we’ve recently launched two types of Junior Cash ISAs – the Big Little Junior ISA and the Newcastle Junior ISA.