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ISA Millionaires
Stephen B.
Posted: 04 March 2018 12:38:40(UTC)
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There's also the fact that people who leave it to the end may not get round to doing it at all.
Alan Selwood
Posted: 04 March 2018 12:41:09(UTC)
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Based purely on taxation and other people's habits, it could make sense to put all the £20,000 subscription into the ISA on 6th April and then invest it in 3 chunks in Sept, Oct, Nov ready for the typical winter season when stocks rise more than they do in the summer. If investing only once, November might be the best of the 3.

Naturally, if you follow this timing, you will do it in one of the years when investors change their buy/sell emphasis!
3 users thanked Alan Selwood for this post.
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JohnW
Posted: 04 March 2018 12:42:51(UTC)
#25

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It's also a fact that If they did not do it at all then they are not involved in this conversation. No platform is going to get rich out of people who don't invest in any platform. They simply don't rate in the early or late discussion. I stand my the facts which I stated.
Tony Peterson
Posted: 04 March 2018 12:44:48(UTC)
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JohnW

Not so. If you invest in an ISA on the first day of the tax year, the dividends (invested quickly themselves) and growth accumulated during that tax year will be compounding in all subsequent tax years.

If you wait to invest on the last day you miss out on that growth, perpetually.
John O'Dell
Posted: 06 March 2018 16:28:47(UTC)
#27

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Just out of interest, I am one of those 168 "ISA millionaires" with HL. Although I started investing with PEPs and continued into ISAs, I have occasionally used my allowance for structured products (eg. a Morgan Stanley "Autocall" yielding 9.5% in 2011 which was called and is now re-absorbed in the equity/bond portfolio) and fixed rate cash ISAs (£5640 in 2012 and £15,000 in 2014 which have remained outside). Despite that, the current valuation of the HL portfolio is £1,137,000. Current breakdown as follows (not necessarily unchanged) :

Fidelity Special Values Ordinary 5p 118,720.00
Polar Capital Technology Trust plc Ordinary 25p 93,280.00
Fidelity Japanese Values plc Ordinary 25p 89,400.00
Mercantile Investment Trust Plc Ordinary 25p Shares 83,800.00
Templeton Emerging Markets Inv Tst plc Ordinary 25p 77,600.00
Fidelity Asian Values Ordinary 25p 67,900.00
Biotech Growth Trust (The) Ordinary 25p 55,500.00
JPMorgan Indian Investment Trust Ordinary 25p 55,360.00
WH Smith Plc Ordinary 22 6/67p shares 52,832.00
Fidelity China Special Situations PLC Ordinary Shares 1p 50,794.88
iShares plc Core GBP Corporate Bond 47,160.30
Manchester & London Inv Tst plc Ordinary 25p 44,100.00
Fidelity UCITS ICAV Global Quality Income UCITS GBP INC *1 41,220.00
Golden Prospect Precious Metals Ltd Ord Gbp0.001 40,250.00
VPC Specialty Lending Investments plc Ordinary 1p 37,044.00
Dunedin Enterprise Investment Trust Ordinary 25p *2 37,000.00
Carnival plc Ordinary USD1.66 34,770.00
Sky plc Ordinary 50p 33,675.00
Temple Bar Investment Trust plc Ordinary 25p Shares 31,400.00
BlackRock World Mining Trust Ordinary 5p 23,250.00
GlaxoSmithKline plc Ordinary 25p 19,770.00
Golden Prospect Precious Metals Ltd Subscription Shares NPV 1,700.00
Fidelity Asian Values Subscription Shares GBP0.00001 560

...NB all individual stocks, ITs or ETFs so fee capped at £45 pa.
19 users thanked John O'Dell for this post.
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philip gosling
Posted: 06 March 2018 17:28:31(UTC)
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Joe 90 As KL said drip feeding over months can leave you vulnerable as happened to me when I used my full PEP allowance to invest in Henderson Technology many years ago drip feeding automatically over 6 months and lost out as the bear I had feared arrived in month 7.

With bank rates so low holding more ISA money in cash does not cost so much and it keeps it easily available for investing if you see the right opportunity for new investment or to top up existing holdings.
4 users thanked philip gosling for this post.
King Lodos on 06/03/2018(UTC), Joe 90 on 06/03/2018(UTC), mcminvest on 06/03/2018(UTC), Alan M on 07/03/2018(UTC)
Aminatidi
Posted: 06 March 2018 17:30:19(UTC)
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John O'Dell;58300 wrote:
Just out of interest, I am one of those 168 "ISA millionaires" with HL. Although I started investing with PEPs and continued into ISAs, I have occasionally used my allowance for structured products (eg. a Morgan Stanley "Autocall" yielding 9.5% in 2011 which was called and is now re-absorbed in the equity/bond portfolio) and fixed rate cash ISAs (£5640 in 2012 and £15,000 in 2014 which have remained outside). Despite that, the current valuation of the HL portfolio is £1,137,000. Current breakdown as follows (not necessarily unchanged) :

Fidelity Special Values Ordinary 5p 118,720.00
Polar Capital Technology Trust plc Ordinary 25p 93,280.00
Fidelity Japanese Values plc Ordinary 25p 89,400.00
Mercantile Investment Trust Plc Ordinary 25p Shares 83,800.00
Templeton Emerging Markets Inv Tst plc Ordinary 25p 77,600.00
Fidelity Asian Values Ordinary 25p 67,900.00
Biotech Growth Trust (The) Ordinary 25p 55,500.00
JPMorgan Indian Investment Trust Ordinary 25p 55,360.00
WH Smith Plc Ordinary 22 6/67p shares 52,832.00
Fidelity China Special Situations PLC Ordinary Shares 1p 50,794.88
iShares plc Core GBP Corporate Bond 47,160.30
Manchester & London Inv Tst plc Ordinary 25p 44,100.00
Fidelity UCITS ICAV Global Quality Income UCITS GBP INC *1 41,220.00
Golden Prospect Precious Metals Ltd Ord Gbp0.001 40,250.00
VPC Specialty Lending Investments plc Ordinary 1p 37,044.00
Dunedin Enterprise Investment Trust Ordinary 25p *2 37,000.00
Carnival plc Ordinary USD1.66 34,770.00
Sky plc Ordinary 50p 33,675.00
Temple Bar Investment Trust plc Ordinary 25p Shares 31,400.00
BlackRock World Mining Trust Ordinary 5p 23,250.00
GlaxoSmithKline plc Ordinary 25p 19,770.00
Golden Prospect Precious Metals Ltd Subscription Shares NPV 1,700.00
Fidelity Asian Values Subscription Shares GBP0.00001 560

...NB all individual stocks, ITs or ETFs so fee capped at £45 pa.


As a curiosity how many of those have been "buy and hold" and how much has been churn/turnover please?
Narendra Dhariwal
Posted: 06 March 2018 18:01:18(UTC)
#30

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Aminatidi;58303 wrote:
John O'Dell;58300 wrote:
Just out of interest, I am one of those 168 "ISA millionaires" with HL. Although I started investing with PEPs and continued into ISAs, I have occasionally used my allowance for structured products (eg. a Morgan Stanley "Autocall" yielding 9.5% in 2011 which was called and is now re-absorbed in the equity/bond portfolio) and fixed rate cash ISAs (£5640 in 2012 and £15,000 in 2014 which have remained outside). Despite that, the current valuation of the HL portfolio is £1,137,000. Current breakdown as follows (not necessarily unchanged) :

Fidelity Special Values Ordinary 5p 118,720.00
Polar Capital Technology Trust plc Ordinary 25p 93,280.00
Fidelity Japanese Values plc Ordinary 25p 89,400.00
Mercantile Investment Trust Plc Ordinary 25p Shares 83,800.00
Templeton Emerging Markets Inv Tst plc Ordinary 25p 77,600.00
Fidelity Asian Values Ordinary 25p 67,900.00
Biotech Growth Trust (The) Ordinary 25p 55,500.00
JPMorgan Indian Investment Trust Ordinary 25p 55,360.00
WH Smith Plc Ordinary 22 6/67p shares 52,832.00
Fidelity China Special Situations PLC Ordinary Shares 1p 50,794.88
iShares plc Core GBP Corporate Bond 47,160.30
Manchester & London Inv Tst plc Ordinary 25p 44,100.00
Fidelity UCITS ICAV Global Quality Income UCITS GBP INC *1 41,220.00
Golden Prospect Precious Metals Ltd Ord Gbp0.001 40,250.00
VPC Specialty Lending Investments plc Ordinary 1p 37,044.00
Dunedin Enterprise Investment Trust Ordinary 25p *2 37,000.00
Carnival plc Ordinary USD1.66 34,770.00
Sky plc Ordinary 50p 33,675.00
Temple Bar Investment Trust plc Ordinary 25p Shares 31,400.00
BlackRock World Mining Trust Ordinary 5p 23,250.00
GlaxoSmithKline plc Ordinary 25p 19,770.00
Golden Prospect Precious Metals Ltd Subscription Shares NPV 1,700.00
Fidelity Asian Values Subscription Shares GBP0.00001 560

...NB all individual stocks, ITs or ETFs so fee capped at £45 pa.


As a curiosity how many of those have been "buy and hold" and how much has been churn/turnover please?
Adastra100
Posted: 06 March 2018 19:00:54(UTC)
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Balvenie;58151 wrote:
Tony Peterson;58143 wrote:
jeffian

I only intended the "get in now" message for those who have not used up their current ISA allowance, obviously, as I am sure you realise..

My hunch is that the optimal use of the allowance in any tax year is to get in, if humanly possible, your full contribution on 6 April, and invest in large enough chunks of stock for each dividend to be of investable size. Leaving contributions to the end of the tax year misses out on those additional investments which have an oversize role in growing your ISA as fast as possible.



Tony, I don't have any ISAs, but instead try to put more in my pension pot. Before April 6, I'll have some spare cash £10k, that I can put either in ISA or SIPP. My thinking that as a 40% tax payer I should put it in my SIPP ? Is my thinking correct ?


Hi Balvenie
Sorry to butt in but you need to take into account your projected current pension income to see if you will be paying the highest rate of tax when you start to draw down. Brown held down the higher rate tax threshold and the current level is not that great - around £45,000 including personal allowance. Take off a State Pension of circa £8000 and you only have to be drawing down £37,000 before you start paying 40% (or higher). The tax rate could go higher and the thresholds be held particularly if a Labour Government gets in. So you may find you are getting the tax rebate at 40% but paying out at 40% or more on your pension. It is therefore arguable to invest the taxed money now in an ISA in the knowledge that the tax free status is less likely to be changed for funds already held as it would be political dynamite. You will still get the growth on a smaller capital sum.

As I approached retirement under the Brown regime, I put 2 years contributions into a SIPP to get some of my tax rebated mainly to spite him!. Max amount of 2x£3600 but with tax rebate net cost 2x£2160. I am now paying 40% tax on my pension income so have not touched the SIPP. Luckily I had been running PEPs and ISAs since the early 90s and I get a very reasonable return from a 6 figure ISA pot and its tax free of course.


2 users thanked Adastra100 for this post.
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Balvenie
Posted: 06 March 2018 20:28:37(UTC)
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Adastra100;58309 wrote:

Hi Balvenie
Sorry to butt in but you need to take into account your projected current pension income to see if you will be paying the highest rate of tax when you start to draw down. Brown held down the higher rate tax threshold and the current level is not that great - around £45,000 including personal allowance. Take off a State Pension of circa £8000 and you only have to be drawing down £37,000 before you start paying 40% (or higher). The tax rate could go higher and the thresholds be held particularly if a Labour Government gets in. So you may find you are getting the tax rebate at 40% but paying out at 40% or more on your pension. It is therefore arguable to invest the taxed money now in an ISA in the knowledge that the tax free status is less likely to be changed for funds already held as it would be political dynamite. You will still get the growth on a smaller capital sum.

As I approached retirement under the Brown regime, I put 2 years contributions into a SIPP to get some of my tax rebated mainly to spite him!. Max amount of 2x£3600 but with tax rebate net cost 2x£2160. I am now paying 40% tax on my pension income so have not touched the SIPP. Luckily I had been running PEPs and ISAs since the early 90s and I get a very reasonable return from a 6 figure ISA pot and its tax free of course.


Excellent post Adastra....I hadn't really thought of it that way on taxation. Plus I live in a country that has a more punitive taxation regime than most on here. With 12+ years to go to retirement, smallish pot of £250k but decent amount being put into salary sacrifice monthly, I suppose I could actually hit the higher tax rate at time of retirement, if the stock market performs well in the next decade or so ? Crystal ball required.

I'm not too worried at present about a labour government getting in compared to the Marxist regime where I live & get robbed in taxation. Scotland.
Jezzer
Posted: 06 March 2018 20:29:20(UTC)
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Just to weigh in on the SIPP vs ISA debate, it seems more likely that the government will find a way to plunder pension pots than ISAs (so I have read) so it may be worth thinking beyond the tax treatment of SIPPs vs ISAs when deciding where to stash your cash.

I can't recall how exactly the plundering would happen (some kind of additional tax or a cap of some sort...?) - i'm sure there are others here who can put some flesh on these bones. Apologies for being rather vague.
Stephen B.
Posted: 06 March 2018 20:55:22(UTC)
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The size of the pension fund is already capped. The most likely change would be abolishing the higher-rate tax relief, but that would only be for new contributions. On ISAs it already seems anomalous that pensions are capped and ISAs aren't, so it wouldn't entirely surprise me to see a cap of some form.
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Mickey
Posted: 06 March 2018 21:14:36(UTC)
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Paper today reported on a Conservative Party idea to also target those persons over 50 years of age, a tax of 1% on property values to be paid annually. As many do not have an income other than pension it would be a very severe tax designed to redistribute wealth to millennials. Calculations showed it would bring in around 6 billion if I remember correctly.
Tony Peterson
Posted: 06 March 2018 21:23:58(UTC)
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Mickey

An idea is one thing.

Consider the age and wealth of the average conservative MP.

Would turkeys really vote for Christmas? Even if severely whipped?.
John O'Dell
Posted: 06 March 2018 21:38:10(UTC)
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Aminatidi;58303 wrote:
John O'Dell;58300 wrote:
Just out of interest, I am one of those 168 "ISA millionaires" with HL. Although I started investing with PEPs and continued into ISAs, I have occasionally used my allowance for structured products (eg. a Morgan Stanley "Autocall" yielding 9.5% in 2011 which was called and is now re-absorbed in the equity/bond portfolio) and fixed rate cash ISAs (£5640 in 2012 and £15,000 in 2014 which have remained outside). Despite that, the current valuation of the HL portfolio is £1,137,000. Current breakdown as follows (not necessarily unchanged) :

Fidelity Special Values Ordinary 5p 118,720.00
Polar Capital Technology Trust plc Ordinary 25p 93,280.00
Fidelity Japanese Values plc Ordinary 25p 89,400.00
Mercantile Investment Trust Plc Ordinary 25p Shares 83,800.00
Templeton Emerging Markets Inv Tst plc Ordinary 25p 77,600.00
Fidelity Asian Values Ordinary 25p 67,900.00
Biotech Growth Trust (The) Ordinary 25p 55,500.00
JPMorgan Indian Investment Trust Ordinary 25p 55,360.00
WH Smith Plc Ordinary 22 6/67p shares 52,832.00
Fidelity China Special Situations PLC Ordinary Shares 1p 50,794.88
iShares plc Core GBP Corporate Bond 47,160.30
Manchester & London Inv Tst plc Ordinary 25p 44,100.00
Fidelity UCITS ICAV Global Quality Income UCITS GBP INC *1 41,220.00
Golden Prospect Precious Metals Ltd Ord Gbp0.001 40,250.00
VPC Specialty Lending Investments plc Ordinary 1p 37,044.00
Dunedin Enterprise Investment Trust Ordinary 25p *2 37,000.00
Carnival plc Ordinary USD1.66 34,770.00
Sky plc Ordinary 50p 33,675.00
Temple Bar Investment Trust plc Ordinary 25p Shares 31,400.00
BlackRock World Mining Trust Ordinary 5p 23,250.00
GlaxoSmithKline plc Ordinary 25p 19,770.00
Golden Prospect Precious Metals Ltd Subscription Shares NPV 1,700.00
Fidelity Asian Values Subscription Shares GBP0.00001 560

...NB all individual stocks, ITs or ETFs so fee capped at £45 pa.


As a curiosity how many of those have been "buy and hold" and how much has been churn/turnover please?


Most have been B&H eg. bought Fidelity Special Values at launch (1995?) and the other Fidelity Its followed soon after and have never been sold down – finishing with the Fidelity China again at launch. Other long-standing holdings include JP Morgan India and Mercantile (UK midcap) Its (which I also used equally to fund £1,000 “bare trust funds” for 6 nephews and nieces between 1994 and 1999, the last of which had reached over £10,000 when passed over last year). Similar story with most of the direct share holdings eg. inherited Carnival when my P&O holding was taken over and have held WH Smith since demerger. Did switch out of Barclays into Glaxo during 2008 crisis and have only held Sky for around 5 years. Used to have much bigger holdings in World Mining and Biotech Growth Trust but trimmed and diversified into Manchester & London and Golden Prospects in 2016/17. I have only been building holdings in VPC, Fidelity Global Quality Income and ICAP Core Corporate Bond ETFs in the last couple of years as a way of increasing yield before retirement.
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Mickey
Posted: 06 March 2018 22:08:44(UTC)
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Tony Peterson;58321 wrote:
Mickey

An idea is one thing.

Consider the age and wealth of the average conservative MP.

Would turkeys really vote for Christmas? Even if severely whipped?.

Well his nickname is apparently 'Two Brains' as he is considered to be very intelligent. But, as the paper said, his idea falls short of the Foreign Aid Budget by about 6 billion, not so intelligent then.
bill w.
Posted: 12 March 2018 11:35:27(UTC)
#37

Joined: 29/07/2008(UTC)
Posts: 2

an interesting chat, this one

death + taxes, there is no other future !! for anyone

unless u believe the sci-fi films about mind x-fer to cyberspace !!??
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