Q. What are ISAs?
A. Individual Savings Accounts (ISAs) are tax efficient savings schemes. We offer a Stocks and Shares ISA and a Lifetime ISA (see Lifetime ISA brochure) that also allows you to hold cash as part of your investment strategy. Investments in an ISA are free of capital gains tax.
Q. Who can open a Stocks and Shares ISA?
A. Anyone 18 or over can open an ISA if they are resident in the UK for tax, or are Crown employees and spouse serving overseas.
Q. How much can I invest in an ISA each year?
A. You can subscribe up to £20,000 into ISAs in the 2017/18 tax year. This may all go into a Stocks and Shares (SAS) ISA. Only one SAS ISA, one Lifetime ISA and one Cash account ISA can be subscribed to in any given tax year but you can use different providers.
Q. What are the tax benefits?
A. Income received on ISA investments should not be included on your tax return. No tax is payable on income received in an ISA. Also, you pay no capital gains tax on investments in your ISA. Any dividend income received outside of an ISA must be listed on your tax return and may attract tax.
Q. What can I buy in a Pilling ISA?
A. You can buy Qualifying shares officially listed on any recognised exchange. AiM shares, qualifying Investment Trusts, Unit Trusts, Open Ended Investment Companies and UCITS are allowed. You can also buy Gilts, Permanent Interest Bearing Shares (PIBS), Bonds, Convertibles and Preference shares. Extra charges may apply to some overseas stocks so you should check with us before dealing.
Q. What's excluded from ISAs?
A. Shares on the PLUS quoted market, Options, Futures, Nil-Paid Shares and Warrants and shares in unquoted companies are excluded.
Q. Can I buy and sell within my ISA?
A. Yes. You can trade as often as you wish, simply ring our team of dealers who will be pleased to assist you on 0161 832 6581.
Q. Do you deal "instantly?"
A. Yes. If preferred, you can often hold on the telephone while your deals are being done.
Q. How do you confirm my deals?
A. If you are registered for Client Web Access (CWA), an email is sent to you informing you that a contract note is on your CWA account for you to view. Alternatively, a contract note is posted to you for every deal showing price, commission etc. If you do not have a contract note, or the contract you have received is incorrect please tell us without delay and at least within 2 business days. Regardless of cause, we can accept no financial liability for missing or incorrect contract notes unless brought to our attention within 10 business days of the original deal(s).
Q. Who chooses the Investments?
A. You. We try to make sure the investments you choose for your ISAs are allowed. However, we do not accept any tax consequences and/or liabilities of any kind should we later find that, whatever the reason, you have chosen non-qualifying or unsuitable investments.
Our dealers are pleased to provide free investment guidance (always on a general "Execution Only” basis) to help you to make your investment decisions. However, you are always responsible for suitability and future investment performance. Our Investment Managers will be happy to provide more detailed personal analysis of your investment portfolio once you return our "Client Agreement.” Details are available on request.
Q. Will I get Newsletters?
A. Yes, we produce a quarterly publication called "Pilling PEP/ISA Talk". For “Client Web Access” (CWA) clients this is viewable on line. We will also produce periodic news bulletins which will only be viewable on CWA.
Q. Can I transfer other ISAs to Pilling?
A. Yes, we make no charge to receive ISAs (that might also contain your old PEPs) from other managers. You should check if your manager makes a transfer penalty. You may transfer part of a plan to us. We can now also receive “Cash” ISA transfers in to a “Stocks and Shares” ISA (see ISA Transfer Form).
Q. Can I transfer shares from a profit sharing or share option scheme into an ISA?
A. Yes. Employees who receive shares in their company from an HMRC approved all-employee savings related share option scheme, or profit sharing scheme, may transfer them into a Pilling ISA. You can transfer up to £20,000 worth of option shares into a ISA. Transfers must take place within 90 days of the stock leaving the approved scheme (see Charges).
Q. Can I transfer shares in my own name into an ISA?
A. Yes. We have to sell the shares and then buy them back into the ISA. This is known as a “Bed & ISA.” Before we can do this we need to be in receipt of your shares. You can either send us your share certificates together with signed CREST transfers or via electronic transfer. You may also buy different shares in the ISA from those you sell. However, the name on the certificate must be yours, your spouse’s or joint names (see Charges).
Q. "Bed & ISA" - any special costs?
A. As "arm's length" deals, you pay the market-maker’s "turn" - ie the spread between the selling and buying prices goes to the market-maker (we can often reduce this for you). You also pay 0.5% Government stamp duty on most purchases.
If the same holding is sold and then bought straight away in your ISA, you only pay commission on one of the trades. If you do not buy the same stock in the plan as the stock you are selling, then you also pay a nominal charge of £10 per sale.
Q. May I leave cash in an SAS ISA?
A. Yes, cash is now accepted as a qualifying investment.
Q. Do you pay interest on cash?
A. Yes. Quarterly, we pay gross interest on your cash on a tiered system at rates fixed by Pilling & Co. Your cash is always held in accounts segregated from our own, and only in banks which are authorised and regulated by the FCA. We pay interest to your account after a variable administrative deduction. Our current rates are always available on request or can be viewed on our website. Amounts less than £1.00 will not be credited. Due to current low interest rates, it is unlikely your ISA will generate sufficient interest to be credited.
Q. How are dividends dealt with?
A. Dividends are credited to your Plan. If there is any tax due from interest payments from gilts for example, we will reclaim this from HMRC and add this to your account. Gross dividend income may be kept in the ISA or paid to you with no tax penalty. Simply tell us on the application form how you wish income to be treated.
Q. Can I re-invest my dividends?
A. Yes. With the Pilling Dividend Re-investment Plan (“DRIP”), where possible all your net dividends are re-invested upon receipt in the shares of the company paying the dividend. Our DRIP commission is only 0.5% (with no minimum). Simply elect on the application form for the “DRIP” scheme.
Q. Can I have my income paid out to me?
A. Yes. With the Pilling Income Distribution System all your income is automatically paid straight to your bank or building society account on a quarterly basis towards the end of January, April, July and October. We send you a statement showing the dividend(s) and the amount paid to your bank account. Payments include only dividends credited to the account up to the 5th of the month. Simply elect on the application form to have your income paid out.
Q. Can I make withdrawals from my ISA?
A. Yes, you can take out cash and investments at any time without liability to Income Tax or Capital Gains Tax. You can also switch your ISA to a Flexible ISA. Under the terms of Flexible ISAs where a withdrawal is made (including income payments as above), any subsequent subscriptions in the same tax year that would otherwise count towards the subscription limit will do so only to the extent that previously withdrawn amounts have been fully replaced.
Q. How are my investments registered?
A. Through CREST, where available, in our nominee “St Anns Square Nominees Limited” (SASNL). You are always the beneficial owner of the investments. They are never part of Pilling & Co’s assets nor, indeed, of the nominee company’s assets. There may be occasions when identical stocks are pooled together within Crest, or at another custodians, as one block under the title of SASNL. These cannot then be attributable to any individual client and ownership will be evidenced by an electronic bookkeeping entry at Pilling & Co instead of a physical certificate. In these circumstances you are warned, that in the unlikely event of an unreconcilable shortfall after the failure of a custodian, clients may share in that shortfall in proportion to their original share of the assets in the pool.
Q. Are my investments secure?
A. Yes. Pilling & Co accepts absolute responsibility for St Anns Square Nominees Limited. Your investments are not only protected under the Financial Services Compensation Scheme (FSCS), but, with the security of Pilling clients in mind, we also maintain additional professional financial risks insurance to cover the changing level of turnover in our business. If your investments must be held by a third party, we will use our best endeavours to make sure that only recognised and well-respected financial institutions are used. There may be further risk with non UK based custodians because of different settlement, legal and regulatory requirements. In some cases dividend payments may be briefly held in a custodians overseas bank account before payment is made to Pilling & Co. However, we do not accept responsibility for such third party safe custody obligations.
Q. How do you deal with “Corporate Actions?”
A. We write to tell you of any action effecting your investments including conversion and subscription rights, takeovers and similar offers. We process any capital reorganisations, demergers etc. You may only take up rights issues and open offers in an ISA if you have cash in the plan, or can add new cash to an ISA. If you do not have enough cash, then the funds must be raised inside the plan. If you can’t do this, you may still take up the entitlement outside your ISA. Where investments are pooled, entitlements are allocated on a “pro rata” basis and are rounded down to the nearest whole unit.
You must give your clear instructions direct to the Pilling ISA Department by phone or by email to email@example.com by the requested date, or we can accept no responsibilty whatsoever for any resulting losses or liabilities.
Q. Can I borrow against my ISA?
A. No. You must always remain the beneficial owner of your ISA investments. They may not be used as security for a loan.
Q. Do I get valuations and statements?
A. Yes. As at 5th April and 5th October each year, we provide you with a statement and valuation as soon as possible after these dates on “Client Web Access” (CWA). You will be able to view your valuations on line as often as you wish once you have registered to do so. If you are not registered for CWA, simply email your account numbers to us at firstname.lastname@example.org and we will send you instructions and a password. These are also available in paper form by request.
Q. Can I have Company Reports and Accounts?
A. Yes. We can arrange this but, to keep down costs, we suggest you get these from the Company Registrars direct. They are also usually available on the company websites.
Q. Do I have the same rights as an ordinary shareholder?
A. Yes. By negotiation, we can arrange for you to attend company meetings, to vote and to receive any other relevant information that is sent to share or unitholders direct.
Q. Can my ISA be "voided"?
A. Yes. We regret that if your plan fails the provisions of the ISA Regulations, it may have to be cancelled ("voided") and we will tell you as soon as possible. However, this is a rare occurrence and we make every effort to ensure this does not happen.
Q. Does Pilling administer its own ISAs?
A. Yes. All our ISAs are administered "in-house" by our own staff and we never delegate our ISA role to a third party.
Q. How are Pilling ISAs “Low Cost”?
A. The annual custody charge for your Pilling ISA is 0.5% of the value and can be as low as only £40 with a maximum of £140. However, this charge not only covers your Pilling ISA but any other account you have with us including SIPP, Nominee, PIPs and Own Name services. We will add the value of all your accounts with us and apply no more than the maximum cap.
Q. Any charges to close or transfer a Pilling ISA?
A. Cash can be withdrawn at no cost on closure, or on full or part transfer to another ISA manager. You may prefer to sell investments at our normal dealing rates to convert them into cash. Shareholdings can be transferred from Pilling ISAs at £24 per holding. You will be charged our Custody Fee on a "pro rata" basis upon closure for the charging period the plans were open with us. Plans that are closed and have contributions which have never been invested will be charged a “failure to invest” fee of £24. Please note that transfers of ISAs can take up to a month to process.
Q. What are the dealing charges?
A. With a minimum of only £10, our commission per deal is 1.65% of the first £10,000 value, 0.5% of the next £90,000 and 0.4% of any excess. These rates apply to all securities. We must charge you Government stamp duty at 0.5% of the value when buying shares, preference stocks and convertibles.
Q. Are there any extra charges on overseas securities?
A. Whenever possible we trade and hold overseas securities through Crest and although the handling costs are higher than UK securities, Pilling & Co absorb the fees and no extra charge is made.
However, if you choose an investment which cannot be traded or held via Crest and a third party has to be used, the cost incurred will be passed on to you. Although most overseas transactions can be accommodated within our commission rates, please enquire at time of dealing as additional charges may be applicable.
Q. Can my investments be sold without my permission?
A. We reserve the right to sell or realise any investment which we are holding (or entitled to receive) on your behalf in order to meet any liabilities you may have incurred to us. Our right to sell any such investment will arise immediately upon default by you in making payment of any amount due to us and in that event we are entitled to sell or dispose of all or any part of such investment (whether these be investments in respect of which the default arises or any other investments for the time being held by us or which we are entitled to receive on your behalf) after the expiry of any statutory notice period. We shall not be liable to you in respect of any loss arising nor in respect of any choice made by us in selecting the investments to be sold. We will apply the proceeds of sale (net of costs) in or towards discharge of your liabilities to us and will account to you for the balance. In the event that such proceeds are insufficient to cover the whole of your liabilities to us, you remain liable for the balance.
We shall be entitled, without further reference to you, to buy any investment in the market to close any short position created by you and then, subject to any statutory notice period, sell or dispose of any other investments held by us or which we are entitled to receive on your behalf to satisfy in whole or in part the sums due on settlement of any such purchase and its associated costs. We shall not be responsible for advising you about the investment merits of any transactions effected by us pursuant to this section which in all cases will be treated as execution only deals.
Q. Can my surviving spouses inherit my ISA tax advantages when I die ?
A. Yes, however the following criteria applies. The death has to be on or after 3rd December 2014. The additional allowance amount will be the value of the ISA as at the date of death. The specific assets held in your ISA do not have to be used for the additional allowance i.e. your spouse could use a separate cash source up to the allowance value. In the case of ‘in specie’ transfers, the additional subscription has to be made within 180 days of beneficial ownership passing to the surviving spouse. In the case of cash subscriptions, the additional subscription has to be made within 3 years of the date of death, or if later, 180 days of the completion of the administration of the estate.
Assets will be able to be directly transferred from your ISA into your spouse’s ISA as/part of the additional allowance. The additional allowance will be on top of the normal allowance of £20,000 for tax year 2017/18. Note that this is about giving the surviving spouse an additional ISA allowance only. It is not related to the assets in the ISA other than being determined by their value at date of death. The actual assets will be distributed in the usual way according to the will. The spouse will be entitled to the additional allowance even if the assets have been left to someone else, or have been used to meet expenses from the estate. No one else will be entitled to this allowance, even if they have received the assets from the ISA.