Investment vehicles

fundsnet provides you with wide range of investment vehicles through investment ISAs, ISA transfers (including Cash ISAs & ISAs previously PEPs) and unit trusts/OEICs . Here you’ll find a brief overview of the main elements of these investments.

Individual Savings Accounts (ISAs) offer generous tax advantages to UK taxpayers, allowing you to invest in cash and/or longer-term investments, such as unit trusts, investment trusts and shares. They are also very flexible, because you can take your money out at any time, although some types have a notice period. There used to be two main types of ISA, a Mini ISA and a Maxi ISA, however from 6th April 2010 this changed:

ISA rules (from 6th April 2010)

From the 6th April 2010 the government increased the ISA allowance for everyone:

• The annual ISA investment allowance has been be raised to £10,200 for everyone. Up to £5,100 of that allowance can be saved in cash with one provider. The remainder of the £10,200 can be invested in stocks and shares with either the same or a different provider.
• ISA savers are able to invest in two separate ISAs each tax year; a Cash ISA and a Stocks and Shares ISA. Mini and Maxi ISAs no longer exist.
• Mini Cash ISAs, TESSA-only ISAs (TOISAs) and the cash component of a Maxi ISA are now automatically Cash ISAs.
• Mini Stocks and Shares ISAs and the Stocks and Shares component of a Maxi ISA are now automatically Stocks and Shares ISAs.
• All Personal Equity Plans (PEPs) are now automatically Stocks and Shares ISAs
• ISA savers are now able to transfer money saved in their cash ISA to their Stocks and Shares ISA.

• You do not pay income tax paid on the income you receive from your ISA savings and investments.
• You do not pay tax on capital gains arising on your investments.
• You do not have to inform HM Revenue & Customs about any gains arising from your ISA savings and investments. 

You can get free advice about the tax rules for ISAs directly from HM Revenue & Customs, by calling the ISA Helpline on 0845 604 1701 or by clicking here.

Transferring an ISA - 0% initial commission and £25.00 per transfer

You can transfer your ISA to another ISA manager, if you hold a Cash ISA or a Stocks and Shares ISA you can transfer these to an Investment ISA with another provider. Note, you can transfer funds from a Cash ISA to a Stocks and Shares ISA with another, however you cannot transfer funds from a Stocks and Shares ISA to a Cash ISA.

Your ISA must be transferred directly between your existing ISA manager and the new one, so you need to ask your existing manager to arrange the transfer. Before doing so, check the terms and conditions with your ISA manager, to find out if/how much you will be charged for transferring the ISA. You cannot arrange a transfer yourself by closing the first ISA and paying the money to another ISA manager.

From the 06 April 2008 Personal Equity Plans (PEPs) no longer exist. If you held a PEP on this date it would have been automatically converted to a Stocks and Shares ISA.

These are collective investments, principally in fixed interest securities (corporate or government bonds) and equities (shares), giving a spread of risk and economies of scale.

Your money is pooled with that of other investors to create one fund. This is normally split into ‘units’, the cost of which is based on the net asset value of each unit, otherwise known as the unit price, which is normally quoted on a daily basis. There is no restriction on the number of units that can be created.

In an Oeic (Open Ended Investment Company), you buy shares rather than units, Oeic pricing is easier to understand as Oeics only have one price, and the fund manager's dealing charges are shown separately.

Oeics operate on what is known as a single-pricing basis. Basically, you take the mid-point between cancellation and the full offer price and this is known as the mid-market price.

Growth within these types of investment will usually be liable to Capital Gains Tax. You can get advice on the HM Revenue & Customs Capital Gains Tax website, or by calling your local tax office – click here and follow the links.