ISA INVESTORS ALERT

ISA investors risk huge IHT bills ...

Thousands of older PEP and ISA investors are in danger of being hit by 40% tax on their portfolios because they have not made protective planning arrangements, according to WAY Group.

WAY Group is appealing to IFAs to alert their clients to their potential inheritance tax liabilities and help them to deal with the problem.

Up to 165,000 investors aged over 70 have PEP/ISA holdings of £100,000 or more, according to WAY Group, meaning they may be exposed to inheritance tax in what is supposed to be a "tax free" investment vehicle. It estimates that PEPs and ISAs account for around £0.5bn of the £3bn raised from inheritance tax annually.

"A couple with the maximum savings allowed in PEPs/ISAs since PEPs first appeared under John Major could easily have a have a joint portfolio running into the hundreds of thousands," says Paul Wilcox, chairman of WAY Group.

"We say it makes little sense to cling on to this investment in its incumbent form, as the Chancellor will simply claim back all those benefits in death duties if the portfolio has not been properly ring fenced via an appropriate estate planning scheme."

He warns investors with substantial equities-based tax free investments could also be hit if they do not gift their portfolios into a flexible trust.

Paul Wilcox,
Chairman & Technical Director, WAY Group.
12th March February 2008.

Press Release Date: 12th March 2008.

Please Note: The above article (by John Bakie) first appeared in IFA Online on 11th March 2008. Reproduced with kind permission.

Note: This commentary has been prepared for Financial Intermediary Clients and Professional Associates of WAY Investment Services Ltd and is not intended for and must not be distributed to Private Investors. This information is supplied to you in confidence and you may not pass it on to any other party without prior written consent. Past performance is not necessarily a guide to future returns and changes in rates of exchange between currencies may cause the value of investments to rise or fall. No representation or warranty is given (express or implied) as to the accuracy, completeness or correctness of the information nor the opinions, interpretations and conclusions contained in this commentary. The commentary does not constitute investment advice or a recommendation to purchase or sell any security. Neither the author nor WAY Investment Services Ltd accept any liability whatsoever for any loss or damage arising in any way from any use of or reliance placed on the commentary. WAY Investment Services Ltd is an Appointed Representative of WAY Fund Managers Ltd which is authorised and regulated by the Financial Services Authority.

Press Release Date: 12th March 2008.