31st March 2011

F&C: Tips on how to avoid last-minute ISA slip-ups

With less than a week left to take out an Individual Savings Account for 2010/11, investors wishing to use their £10,200 annual allowance need to act quickly in order to shelter their assets from tax. But it is easy to make mistakes when you are in a rush, so leading ISA provider F&C Investments has some tips on avoiding last-minute pitfalls.

"It is vital that investors take steps to ensure that their application both arrives on time and is completed correctly, otherwise they will lose the current allowance for good," warns Jason Hollands, Head of Corporate Affairs at F&C.
Hollands cites a number of typical problems that can invalidate an application. These include failure to provide a valid National Insurance number, forgetting to sign a cheque, using cheques that are not from the applicant's own account and applications being delayed in the post.

"It is critical that investors know their National Insurance number and that payments made by cheque are drawn from the account of the applicant. If you apply with a cheque provided by a friend or from a company account then your application will be turned down because of strict rules to protect against money laundering," he said. "However, applications with cheques drawn from a joint account are fine as long as the applicant is named on the cheque book."

Hollands points out that investors applying with a building society cheque need to request that their name is added to the cheque or else the ISA provider may not be able to validate that the funds belong to the applicant.
"One of the most common sources of disappointment each year is applications getting held up in the postal system. Investors applying by post are strongly advised to consider sending their application by Special Delivery, which guarantees it arrives the next day. There is a small fee but it is well worth paying if you really are intent on ensuring your application arrives on time." For F&C's postal ISA applications, 'on time' means by 5pm on 5 April.

The most effective way of beating the deadline is to invest online. F&C's own website (www.fandc.com) enables investors to buy ISAs over the internet. Additionally, F&C's OEIC funds are available on a number of platforms and adviser websites.

"If you invest online you will need to buy using a debit card. Unlike general internet shopping, ISAs cannot be bought with a credit card so it is essential that you have cleared funds in your account and a valid National Insurance number to hand," said Hollands. "Also, it's a good idea not to leave it until the last second as you never know when your broadband might go down or your computer might crash."

Investors who do miss the deadline should not be too downhearted, however: from 6 April the ISA allowance enjoys its first increase in line with inflation, meaning that in the 2011/12 tax year investors can put in £10,680.

The F&C Investment Trust ISA, which offers a choice of 13 investment trusts, is available online from www.fandc.co.uk/isa with the ability to purchase a 2010/11 ISA up until midnight on 5 April using a debit card. Members of the public are encouraged to seek independent financial advice as to the suitability of any investment and are reminded that the value of investment funds can fall as well as rise.

Investments