CASH ISAs. Your guide to tax-free saving.

Transcription

1 CASH ISAs. Your guide to tax-free saving.

2 You ll find everything you need to know about ISAs in this guide. ISAs in a nutshell 3 How your ISA works 4 ISA Promise 5 Which ISA? 6 Key facts about our ISAs 11 Switching your ISA to the Halifax 12 Any questions? 13 Important information 14 Not all of the accounts covered by this booklet are available to new customers at all times. Some ISA s are designed to be opened and managed in a particular way, for example using online banking, and we may offer different rates and terms. We can withdraw accounts and interest rates at any time, however, this won t affect existing customers.

3 ISAs IN A NUTSHELL. ISA stands for Individual Savings Account, and there are different types. They re the easy way to get more from your savings. The benefits of saving in an ISA There are lots of reasons why saving in a cash ISA might be right for you. Here are just a few: Pay less tax on your savings All funds in a cash ISA are tax free, so you can top up each tax year and gradually build more and more tax-free savings. Improved flexibility With the new Flexible ISA changes from 6th April 2016, with our ISA Saver Variable, ISA Saver Online, Variable ISA Saver and Instant ISA Saver, you will be able to withdraw and deposit in the same tax year without affecting your annual ISA allowance. Tax-efficient investments stocks and shares ISAs A stocks and shares ISA isn t tax free, but it is tax efficient you don t pay personal income tax or capital gains tax on any increase in the value of your investment. It s another option open to you if you re looking to invest for at least 5 to 10 years. If this sounds like you, come and talk to us in branch or visit halifax.co.uk/ investments/our-investment-products Innovative finance ISAs Are designed for people who want potentially higher returns and who accept the risks that come with investing in this market. Lifetime ISAs Are designed to allow you to save up to the lifetime ISA allowance each tax year and receive a government bonus of 25% of what you have saved. You can use some or all of the money to buy your first home, or keep it until you re 60 it s up to you. Innovative finance ISA and lifetime ISAs are not sold by Halifax. H The value of a stocks and shares ISA isn t guaranteed and you may get back less than you originally invested. Tax rules may change in the future and taxation will depend on your personal circumstances. N f 3

4 HOW YOUR ISA WORKS. Saving in an ISA is very straightforward, but there are a few differences from ordinary savings accounts. The Financial Conduct Authority is a financial services regulator. It requires us, Halifax plc, to give you this important information to help you to decide whether our Cash ISA is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference. Your annual ISA allowance Firstly, there s a limit on how much you can pay in. For each tax year, which runs from 6th April one year to 5th April the next, the government gives you an ISA allowance. You can choose to invest all or some of your ISA allowance in a cash ISA, a stocks and shares ISA, a lifetime ISA or innovative finance ISA or a combination of all of these as long as you don t invest more than the annual limit. The 2017/18 tax year allowance is: 20,000 for an adult ISA (in a Help to Buy: ISA you can only save an initial deposit of up to 1000 plus up to 200 per month) 4,128 for a Junior ISA The Help to Buy: ISA allowance is lower than the overall ISA allowance. You can only pay into one cash ISA in any tax year so your remaining allowance can only be invested in to a stocks and shares ISA, a lifetime ISA or an innovative finance ISA (contributions to Help to Buy: ISA and a stocks and shares ISA must not exceed the overall limit of 20,000). What if you take money out? If you take money out of your cash ISA, it can be replaced in the same tax year provided that in total you do not exceed the ISA allowance for that tax year. Not all ISA accounts are flexible, so please ask for details. For example: If you deposit 20,000 then withdraw 2,000, you can replace the 2,000 before the end of the tax year. Please note, money cannot be taken out of a junior cash ISA until the child turns 18. This is because once the child is 18, it is their money, not the responsible adult. Additional ISA subscription If your spouse/civil partner has died (on or after 3rd December 2014) you re eligible to invest the amount they held in their ISA at the date of death (including any interest earned up to that date). You can pay in this additional permitted subscription allowance into an existing ISA you have with us already, or open a new one. You cannot pay an additional permitted subscription into a Help to Buy: ISA with us. Paying in to a cash ISA Halifax have a range of cash ISAs, so you can choose one that lets you pay in the way you want, including in branch or online, and by cash, cheque, standing order, or transfer from another account. 4

5 ISA PROMISE. Another great reason to take out an ISA with the Halifax. Halifax promises: 1. When you switch your ISA or Child Trust Fund to us we will not wait for your current provider, we pay interest from day one of receiving your completed transfer application - as long as your funds are free to transfer. 2. We ll keep you informed While switching your cash ISA or Child Trust Fund to us. When your cash ISA is coming to the end of a fixed term. Of your interest rate on paper statements, online and mobile. More details... If your transfer is delayed because your existing ISA has a notice period or restriction, your current provider will let us know when it will be free to move to us, and we ll pay interest from that date. No one wants to be kept in the dark. Especially when it concerns your money. With our cash ISA Promise we ll tell you what s happening with your account. You ll know where you stand and how well your savings are growing. To find out more about our cash ISA Promise and what it means to you, ask one of us in branch or call. We ll be happy to help. 3. We won t offer any of our cash ISA products to new customers only. Our ISA Promise is part of our agreement with you. T ä 5

6 WHICH CASH ISA SUITS YOU? Help to Buy: ISA Who For customers who are First Time Buyers saving for their first home. Aged 16 and over and are resident in the UK for tax purposes. How much Open an account with as little as 1 up to 1,000 within 21 days of account opening. Deposits Save up to 200 each month by standing order, including the month you open the account, meaning your initial deposit could be 1,200. Withdrawals Unlimited. Remember, you can t claim the government bonus on any money you withdraw, therefore if you make withdrawals it may take you longer to save towards your first home as you can only pay in a maximum of 200 a month. Interest Variable rate. Tax free. Paid annually. Access In branch, over the phone and online. It can be closed in branch. GOVERNMENT BONUS The Government will pay a 25% bonus on your final balance (minimum 400, maximum of 3,000). To receive your bonus: close your account in branch in one transaction when you are ready to buy your first UK property (up to the value of 250,000 outside London and 450,000 inside London). Any costs incurred before the completion cannot be covered by the bonus. provide your Help to Buy: ISA closing documents to your conveyancer and they will claim the bonus on your behalf. Use our hassle-free ISA transfer service and switch any existing ISA balances you have to us from elsewhere. FOUND THE RIGHT ISA? For current interest rates and to apply, ask us today in branch, call or visit halifax.co.uk/savings 6

7 ANY QUESTIONS ABOUT HELP TO BUY? I m saving to buy a house with my partner can we have a joint Help to Buy: ISA? ISAs cannot be opened jointly, but if your partner also meets the eligibility criteria, they can also open a Help to Buy: ISA and both bonuses can be used together. What s the maximum I can save? An initial deposit of 1,000 plus 200 per month. However, the 25% bonus has a cap of 3,000 which would be reached when you have saved 12,000 including interest earned. Can I get the money paid directly to me? The scheme is administered by UKAR Corporate Services Limited (UKAR). Your conveyancer must apply to UKAR for the bonus on your behalf and will receive the bonus payment. How do I claim the 25% bonus when I come to buy my home? You ll need to close your account in one transaction in branch and provide your Help to Buy: ISA closing documents to your conveyancer at the time of purchasing your home and they will claim the bonus on your behalf. Can I use any conveyancer? No, only conveyancers registered with the scheme can be used. So, you will need to ask this when appointing a conveyancer. Can I use the bonus for a Buy to Let property or a home abroad. No, the scheme is designed for first time buyers to live in their homes here in the UK. What happens if my house sale falls through? If your purchase falls through we will open a new help to buy: ISA within 12 months up to your final balance for your savings. Any bonus paid to your conveyancer will be returned to the scheme administrator. You can make another bonus claim when you are ready to buy your property. PLEASE NOTE By holding a Help to Buy: ISA with us you agree that we can share relevant information about you and your Help to Buy: ISA savings to, amongst others, the Help to Buy: ISA scheme administrator, which is responsible for processing any claim you make. You can find more detail on how your information is used below: a) HM Treasury ( government/organisations/hm-treasury) is the Data Controller for the Help to Buy: ISA Scheme; b) Information relating to each Eligible Customer will be shared with HM Treasury, UKAR (as Administrator of the Scheme) and UKAR contractors and Third Parties. The purposes of doing this are to enable HM Treasury and the Administrator / UKAR and the UKAR contractors to: administer the Help to Buy: ISA Scheme including confirming eligibility for the Scheme and paying bonuses; carry out data reporting, compliance, investigations, audit and fraud prevention work necessary to run the Scheme; and compile management and statistical information about the performance of the Scheme. c) HM Treasury and/or the Administrator, or one or more contractors will use the information for the purposes above. 7

8 ISA SAVER VARIABLE. Who For customers aged 16 and over and are resident in the UK for tax purposes. How much Open an account with as little as 1. How long 12 months. Deposits Unlimited up to the current tax year ISA allowance and transfers in from previous years cash ISA allowances. Withdrawals Unlimited. Any money you take out, can be replaced in the same tax year provided that in total you do not exceed your ISA allowance for that tax year. What happens at the end of my term? Before your term finishes, we ll contact you, to let you know what your options are. If you don't take any action your account will become an Instant ISA Saver. Use our hassle-free ISA transfer service and switch any existing ISA balances you have to us from elsewhere. FOUND THE RIGHT ISA? For current interest rates and to apply, ask us today in branch, call or visit halifax.co.uk/savings Interest Variable rate for 12 months. Tax free. Paid annually. Access In branch, over the phone and online. 8

9 ISA SAVER FIXED. Who For customers aged 16 and over and are resident in the UK for tax purposes. How much Open an account with 500 minimum. How long Choose a term between 1 and 5 years. As not all of the terms are available at all times, please ask for details. Deposits You have 60 days to deposit funds up to the current ISA allowance, plus transfers in. Withdrawals No withdrawals. Early closure permitted subject to a charge, which could mean you would get back less than you originally deposited. To see the equivalent amount of tax-free interest you would lose if you close your account early, see page 11. Interest Fixed rate. Tax free. Paid annually or monthly. Can be paid into the account or paid away into another account of your choice. Access In branch, over the phone and online. Bear in mind If you open an ISA Saver Fixed this tax year, but don t pay in your whole cash ISA allowance, you ll limit the amount you can hold in cash ISAs this tax year. You can only fund one cash ISA per tax year. Tax treatment depends on your individual circumstances and may change. For ISA funding limits, please ask in branch. What happens at the end of my term? Before your term finishes, we ll contact you, to let you know what your options are. If you don t tell us what to do with your money the account will become an Instant ISA Saver account. Use our hassle-free ISA transfer service and switch any existing ISA balances you have to us from elsewhere. FOUND THE RIGHT ISA? For current interest rates and to apply, ask us today in branch, call or visit halifax.co.uk/savings 9

10 SIMPLE SAVINGS FOR CHILDREN. JUNIOR CASH ISA. Who For children 17 and under who are resident in the UK. You can transfer savings from another Junior ISA or Child Trust Fund (CTF) provider to a Halifax Junior Cash ISA but the CTF must be transferred when the Junior Cash ISA is opened. If your child is 15 or under, and you have parental responsibility for them, you must open and run the account. How much Open an account with as little as 1. How long No minimum or maximum term. Deposits Unlimited up to the current tax year Junior ISA allowance. Any money paid into a Junior stocks and shares ISA will also count towards the annual limit. Withdrawals Other than transfers to another junior ISA, no withdrawals until the child reaches 18. Interest Variable rate. Tax free. Paid annually. JUNIOR CASH ISA. What happens when the child turns 18? The Junior Cash ISA will automatically convert into an adult cash ISA. Who can deposit funds? Grandparents, friends, anyone. Deposits can be made in any Halifax branch. Whose name is the account in? The account is in the child s name even if managed by a parent or guardian. At 16 the child can request to manage it themselves. Junior ISA limits are different from adult ISAs. For the current ISA limits please see page 4 or ask in branch. See page 14 for more important information about our Junior Cash ISA, and please refer to the Halifax variable interest rates leaflet. Access In branch. 10

11 KEY FACTS ABOUT OUR CASH ISAS. Summary of key product information: Account name Interest rates Tax status Help to Buy: ISA ISA Saver Variable ISA Saver Fixed Junior Cash ISA For current interest rates please refer to our variable or fixed interest rate leaflet available in branch, by telephone or online. Interest will be paid tax free. Conditions for bonus payment We do not pay a bonus, but see page 6 for details of the Government bonus. Sometimes we may offer a bonus on this account. To find out more, ask in branch, by telephone or online. There s no bonus available on this account. Withdrawal arrangements Unlimited number of withdrawals. No withdrawals allowed.* No withdrawals allowed until the child is 18.** Access Branch, telephone and online. Closures in branch only. Branch, by telephone and online. Manage in branch, by telephone or online. Early closure in branch only. Balance enquiry in branch. * Early closure in branch permitted. If you close your account early, you lose an amount based on the term chosen, equivalent to: 1 year 90 days tax-free interest 18 months 135 days tax-free interest 2 year 180 days tax-free interest 3 year 270 days tax-free interest 4 year 320 days tax-free interest 5 year 365 days tax-free interest This amount will be taken from the balance of your ISA Saver Fixed so you may get back less than you deposited. ** Except transfers to another Junior ISA, except in the specific circumstances set out in the Halifax cash ISA conditions and information. 11

12 SWITCHING YOUR ISA TO HALIFAX. You can transfer funds from other ISAs into any of our cash ISAs. Just complete one form for each ISA you re switching from and we ll do the rest. It couldn t be easier. Five steps to a simple switch 1 Choose your Halifax cash ISA. 2 We ll open your new account as quickly as possible. 3 We ll ask who you currently have your ISA with so we can transfer your money over to your new account. 4 With our ISA Promise, we pay interest from the day we receive your completed ISA transfer form see page 5 for full details. 5 We ll write to you when the transfer s complete should be no longer than 15 days from receiving your completed transfer form. For a stock & shares ISA within 30 calendar days. Please note, if you're transferring your stocks and shares ISA to a cash ISA with us. The price of the stocks and shares you hold could go up while the transfer is happening, you will lose out on any increase in value. Halifax will not be liable if this happens. 12

13 ANY QUESTIONS? If you ve still got questions about switching, here are some answers to the most common queries from our customers. When can I switch my ISA from another provider to the Halifax? You can switch your ISA at any time of the tax year. If your current ISA has a notice period or restriction you may lose interest on your ISA by transferring straight away. Please check with your existing ISA provider. Can I switch more than one ISA? Absolutely. Just complete one form for each ISA you want to switch to the Halifax. If I switch my ISA to the Halifax, when will the money show in my account? The money will show as a credit on the day we receive it from your previous provider. Do I have to move all the money in my cash ISA I hold elsewhere? With adult ISAs, you can transfer any amount as long as you only have one cash ISA, one stocks and shares ISA or one innovative finance ISA that hold current tax year s subscriptions. With Junior ISAs you can hold one cash ISA and one stocks & shares ISA. If I ve started saving in an adult ISA with another provider can I transfer this to the Halifax? Yes. For example, if you ve saved 2,000 in an ISA with another provider, you could transfer your balance(s) to us and save the rest of your ISA allowance for the current tax year with us. If I have a previous year s ISA savings with another provider, can I transfer it all and still have this year s ISA allowance as well? Yes, you can transfer it all to your new Halifax ISA. And as long as you haven t already topped up an ISA this year, you can add the full amount of this year s allowance. I m new to the Halifax what ID will you need to see? By law we need to check the identity of all our customers. So first we ll need to: Do an electronic ID check with a credit reference agency. If everything s okay, that s all we need to do. Alternatively we may ask to: See one document from you that s been issued by the Government. This could be a driving licence or your passport. Plus, we may request another document like a recent bank statement or a utility bill. To open an ISA account you will need to provide us with your National Insurance number. 13

14 IMPORTANT INFORMATION. ISA terms and conditions This booklet gives you a snapshot of all our current Halifax cash ISAs. Each comes with its own detailed conditions, which you ll need to agree to before you can open and use the account. We ll give you these conditions either in branch, or by posting them to you if you open an account over the phone. For online applications, the conditions can be found online. You can also ask for a copy of them at any time. Tax and interest Tax free is the contractual rate of interest payable where interest is exempt from income tax. Tax rules may change. The favourable tax treatment for cash ISAs depends on your personal circumstances and may vary in future. You can change your mind If you open an ISA, but then decide it s not right for you, you ve 14 days to cancel it without charge starting from the day after you open your account (or if you open your account by phone, from the day you receive your conditions if that s later). (If you cancel your ISA at this point, you ll still be able to open another cash ISA in the same tax year.) Send your notice in writing to: Halifax PO Box 548, Leeds LS1 1WU or, if you have a Junior Cash ISA, contact your local branch. We ll repay any credit balance and interest on the account for the time your money was with us. If you miss the 14-day deadline, you may still close your account, as explained in the account conditions, but you won t be able to open another one in the same tax year. You can t close a Junior Cash ISA after 14 days except in the specific circumstances set out in the account conditions. 14

15 DO YOU NEED EXTRA HELP? If you d like this in Braille, large print, audio or another format please ask in branch. If you have a hearing or speech impairment you can contact us using the Next Generation Text (NGT) Service or via Textphone on (lines open seven days a week, 9am 5.30pm). If you re deaf you can also use BSL and the SignVideo service at halifax.co.uk/ accessibility/signvideo Our promise Our promise is to do our best to resolve any problems you have. If you wish to complain visit your local branch or call (Textphone if you have a hearing impairment.) For more information visit halifax.co.uk/contactus/howtocomplain If you re still not happy and we can t put things right to your satisfaction, you can ask the Financial Ombudsman Service to look at your complaint provided you have tried to resolve the matter directly with us first. We hope you won t need to contact the Financial Ombudsman Service but if you do, we ll tell you how to do this. Calls may be monitored or recorded. Not all telephone banking services are available 24 hours a day, seven days a week. Please speak to an adviser for more information. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number All the information in this brochure was correct when it was printed (April 2017). Compliance No: Eligible deposits with us are protected by the Financial Services Compensation Scheme. We are covered by the Financial Ombudsman Service.

16 IT S EASY TO GET IN TOUCH. (( Come in e Y e Call: Y Click: halifax.co.uk 1/ (04/17)