Will the new Isa allow my client to benefit?

Rosemary Heaversedge

As Jeff Prestridge remarks in his column of 7 April, in respect of the new tax year: “So, a lot of change to deal with”.

Naturally, advisers are looking for the changes that may benefit various clients in different ways.

One of my clients lost her husband before she was able to inherit the Isa allowance. The result is she holds a lot of collectives. Naturally, these are moved each April to use the new Isa allowance.

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However, this year brought a dilemma. Some of her funds contain fixed interest, while others are equity-based. After the March budget, but before 5 April, I asked FundsNetwork if funds would be identified as producing ‘savings allowance’ income, where there is a tax-free allowance of £1,000.

With the current interest rates, my client could benefit from such income falling into the allowance. But the £5,000 tax-free dividend allowance will be used up by dividends from share holdings she owns.

While FundsNetwork tell me that they can identify the funds that fit the interest-paying category on their systems, there is no apparent labelling for such funds within the record of income paid.

With common sense, I, too, can identify the funds that had prompted me to raise a query in the first place. Does one just record the income under interest for the Revenue and explain the rationale if questioned? Some support from platform and other providers would simplify the task greatly.

Rosemary Heaversedge


Shropshire Independent Financial Services