Are Share Isas A Waste Of Time Now?

[aclwalker]

Since prudent Brown did away with the tax rebate on dividends in ISAs and the like, are share ISAs now a waste of time?

Obviously they're not a waste of time for someone who has managed to amass a great amount in previous years, but what about for someone starting from scratch today with a single year's maximum allowance for a shares ISA? Is there any real benefit left now?

[oracle]

not necessarily,but if you do go for one,then choose the fund you wrap it in carefully.

merrill lynch gold+general resource has done well,and it's in a good long-term sector so should continue to do so.

same with JPMF natural resources.

....an interesting play would be japanese listed stock fund,I think it should do pretty well over 10 years or so.

....would not be keen on dow at this stage.

[Charlie Don't Surf]

I'll let you know in a couple of years!

[Too expensive to trade up]

Since prudent Brown did away with the tax rebate on dividends in ISAs and the like, are share ISAs now a waste of time?

....

  Is there any real benefit left now?

<{POST_SNAPBACK}>

If you pay the higher rate of tax then yes ISA share accounts are still viable since you don't have to pay anymore tax.

If you a basic tax payer like myself then the only advantage is that you don't pay capital gains tax on your earnings. I believe outside an ISA you only pay CGT if your profits are more than 8K a year which I suspect none of us has done recently!

So once again Mr Brown creates an invesement vehicle that only benefits the relativley wealthy.

[penbat1]

If you pay the higher rate of tax then yes ISA share accounts are still viable since you don't have to pay anymore tax.

If you a basic tax payer like myself then the only advantage is that you don't pay capital gains tax on your earnings. I believe outside an ISA you only pay CGT if your profits are more than 8K a year which I suspect none of us has done recently!

So once again Mr Brown creates an invesement vehicle that only benefits the relativley wealthy.

<{POST_SNAPBACK}>

I would be surprised if many people ever volunteer that they have taken more than 8K a year profit to the taxman even for the few to whom it may be apply. Does the inland revenue ever do any pro-active checks ?

[marzipan]

So once again Mr Brown creates an invesement vehicle that only benefits the relativley wealthy.

you can only invest up to 3 or 4 grand a year in a share isa, which isn't much for a years savings, so how does that benefit the wealthy? (mind you i don't have a mortgage)

once you've invested the money in the isa it will be tax free for life so don't touch it for 15, 20 years and the 3 grand could grow into a substantial sum with that extra boost from the tax savings.

personally I wouldn't take investment advice from anyone on a web forum but its up to you.

Edited August 11, 2005 by marzipan

[penbat1]

you can only invest up to 3 or 4 grand a year in a share isa, which isn't much for a years savings, so how does that benefit the wealthy? (mind you i don't have a mortgage)

once you've invested the money in the isa it will be tax free for life so don't touch it for 15, 20 years and the 3 grand could grow into a substantial sum with that extra boost from the tax savings.

personally I wouldn't take investment advice from anyone on a web forum but its up to you.

<{POST_SNAPBACK}>

You have to have a fair amount of wealth and spare money behind you to save 3 to 4 grand a year (exclusing cash savings)

Unless you withdraw more than about £8000 a year profit, there wont be any tax savings and that situation isnt very likely.

I much prefer to go by the opinions of people here than paid financial advisors who often just spew out spin and bullsh1t so they can line their pockets - they are the scum of the earth.

[aclwalker]

Thanks for the replies. I did think that if you were spectacularly lucky with, say, a single share in an ISA that you could get spectacular capital growth and then keep that for a long time.

I'll need to research further...

[Too expensive to trade up]

...

you can only invest up to 3 or 4 grand a year in a share isa, which isn't much for a years savings, so how does that benefit the wealthy?

...

<{POST_SNAPBACK}>

It benefits the weathly because if they held the shares outside an ISA they would have to pay the extra tax. We have a crazy situation where the Chancellor has created tax schemes such as share ISAs, property in SIPPS that only benefit the wealthy.

There's very little incentive for the people who need to save the most (i.e. those on lower incomes). Except perhaps the shareholder pensions.