# Money Experts



## Rabbitcat (Aug 31, 2014)

Hi folks

Have we any money experts on here? Want to ask a very general question about an ISA.

Cheers


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## Turtles (Jan 9, 2011)

Try me.


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## Rabbitcat (Aug 31, 2014)

Thanks Turtkes.
It's just a general query and for once a happy one.

We have had an ISA for about 12 years and it more or less was just reflecting the money we put in

But just checked it the other day and for the past 18 months it's roughly going up at twice the amount we are putting in, (£200 a month going in, increasing about £380 a month)

My question is - why such a dramatic increase? Please don't tell me there's been a mistake- I couldn't handle it!!!!

Cheers


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## Turtles (Jan 9, 2011)

Is it invested in shares? They've gone up, and the effect is exaggerated if measuring in £ because of Brexit effects. Measured in euros, things will seem less exciting.


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## Rabbitcat (Aug 31, 2014)

It's all in Sterling

It's invested in " European Equity" - haven't a clue what that means but that's what it says on the Statement.

All I know is over past 18 months we put in roughly £3600 yet our cash in value has went up by £6840

Up until now it was basically a piggy bank with the cash in value reflecting roughly what we had put in over previous 12 years


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## snikpoh (Nov 19, 2007)

The FTSE 100 has shot up since Brexit was voted for as have Eurostoxx.

This may be the reason.


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## Rabbitcat (Aug 31, 2014)

So Snik is it time to cash it or hang in there?


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## The Skipper (Nov 26, 2014)

Rabbitcat said:


> So Snik is it time to cash it or hang in there?


If you are planning to move to Spain and become a tax resident here, you definitely need to take professional advice about the status of your ISA. What might be tax exempt in the UK is not necessarily so in Spain (and that includes Premium Bond prizes!). As Snikpoh says, stock markets around the world have seen some dramatic gains in recent months and that is probably why your ISA has increased in value. My investments have done the same.


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## Rabbitcat (Aug 31, 2014)

Cheers Skipper.
Now to be fair in our case we aren't talking massive cash but a nice wee pot. 

When we decide on a permanent move date we will make sure it's cashed in before we become tax liable in Spain, if that's what it takes.


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## snikpoh (Nov 19, 2007)

Rabbitcat said:


> Cheers Skipper.
> Now to be fair in our case we aren't talking massive cash but a nice wee pot.
> 
> When we decide on a permanent move date we will make sure it's cashed in before we become tax liable in Spain, if that's what it takes.


Is that 'wee pot' as in 'under the bed'???


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## stevec2x (Mar 24, 2012)

I don't have an ISA, but I do have a pension fund, and that fund has increased so much in value in the last 6 months that I've begun to wonder if Scottish Widows have got me mixed up with somebody else! lol


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## Turtles (Jan 9, 2011)

There's no need to cash in an ISA before leaving the UK. You will certainly lose the tax advantages, but the investment can stay put, if that's what you want. You would have to declare it to Spain on any future tax return.


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## The Skipper (Nov 26, 2014)

Turtles said:


> There's no need to cash in an ISA before leaving the UK. You will certainly lose the tax advantages, but the investment can stay put, if that's what you want. You would have to declare it to Spain on any future tax return.


I can't see the point in keeping a UK ISA if you live in Spain and therefore have to pay tax on any profit. Surely better to cash-in the ISA before becoming a Spanish tax resident and then investing the proceeds in a tax-efficient Spanish investment plan? Hacienda approved investment plans can, by the way, be in Sterling (mine is, although I wish I had listened to my financial adviser last year and converted to Euros!).


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## Turtles (Jan 9, 2011)

It's just easier not to sell if you don't need to. Maybe you could find a better Spanish product, but after losing a chunk when selling the ISA, then another when converting into euros, and then paying Spanish commissions (nearly always higher than in the UK) that could be hard. I'd be interested to know what kind of "tax-efficient Spanish investment plan" you mean Skipper. There's nothing as simple or attractive as an ISA here, and the opportunities for private pension savings are very unappealing. Costs are absurd, information is poor quality, and contribution limits are low. The main selling point of many Spanish financial products is the free set of towels, rather than the fit with the customer's needs.
I would say to the OP though, that selling the fund within the ISA and then reinvesting now would mean no UK capital gains tax to pay. If you sell it while in Spain the gain would be calculated based on the original price. Not only is that a bill you can avoid, it's also really hard to work out if you have been paying in every month.


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## The Skipper (Nov 26, 2014)

Turtles said:


> It's just easier not to sell if you don't need to. Maybe you could find a better Spanish product, but after losing a chunk when selling the ISA, then another when converting into euros, and then paying Spanish commissions (nearly always higher than in the UK) that could be hard. I'd be interested to know what kind of "tax-efficient Spanish investment plan" you mean Skipper. There's nothing as simple or attractive as an ISA here, and the opportunities for private pension savings are very unappealing. Costs are absurd, information is poor quality, and contribution limits are low. The main selling point of many Spanish financial products is the free set of towels, rather than the fit with the customer's needs.
> I would say to the OP though, that selling the fund within the ISA and then reinvesting now would mean no UK capital gains tax to pay. If you sell it while in Spain the gain would be calculated based on the original price. Not only is that a bill you can avoid, it's also really hard to work out if you have been paying in every month.


The "tax-efficient Spanish investment plan" I refer to is in the form of a Hacienda-approved life insurance wrapper which allows investors to hold a choice of assets (shares, bonds) in their portfolio. The capital growth is not taxed but when you draw down funds a small amount of tax is deducted and paid on your behalf to the taxman. The tax savings are considerable! There are a number of reputable financial advisers in Spain who can set up a portfolio for you. I use Blevins Franks (https://www.blevinsfranks.com/News/BlevinsFranks/Article/spain-tax-portfolio-assuance-bonds) but there are many others.


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## Turtles (Jan 9, 2011)

Thanks for that link Skipper. Is the main point of these wrappers that you can change investments within them without triggering a CGT bill until you make a withdrawal? If you just chose your own investments to buy and hold *outside* a wrapper, then the CGT bill would be the same. You would be taxed annually on dividends (not on gains), but you would have an unlimited choice of investments, and no insurance company commissions to pay.
I'd like to investigate this further. Could you point me to a specific company and product I could look at?


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## Turtles (Jan 9, 2011)

I am particularly interested in assessing fees, commissions and any other costs that can be hidden in a complicated product. Experience has taught me that "tax efficient" is often a marketing slogan for high cost funds.


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## The Skipper (Nov 26, 2014)

Turtles said:


> Thanks for that link Skipper. Is the main point of these wrappers that you can change investments within them without triggering a CGT bill until you make a withdrawal? If you just chose your own investments to buy and hold *outside* a wrapper, then the CGT bill would be the same. You would be taxed annually on dividends (not on gains), but you would have an unlimited choice of investments, and no insurance company commissions to pay.
> I'd like to investigate this further. Could you point me to a specific company and product I could look at?


I have switched products within my wrapper several times without incurring a tax charge. I started with 100% corporate bonds, then changed to a mainly equity based portfolio and then changed to a totally different equity fund and there were no tax implications in any of the moves. There are, of course, charges from the fund managers but at the end of the day you have to look at the net returns. In my case they have been excellent and my capital value is about the same as it was eight years ago despite regular cash withdrawals to help with living costs. As I said before, my advisors are Blevins Franks (https://www.blevinsfranks.com/Spain...YUf_yVcujTnUhCaWBfT1xxy1gPBnoLbNi1RoC1trw_wcB) and they have a number of offices in Spain.


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