AXA ISA

By: EconomyWatch   Date: 30 September 2009

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An AXA ISA is a tax-saving package that allows you to invest without attracting any taxes. An Individual Savings Account is a vehicle for investing, such as investing in unit trusts. It has two components, Cash ISAs and Stocks and Shares ISAs. AXA does not offer any cash ISAs. The bank offers only Stocks and Shares ISAs in collaboration with various financial institutions.

AXA ISA: Limitations 

One can save up to £7,200 in a Stocks and Shares AXA ISA each tax year. Since the total ISA allowance is £7,200, you need to adjust your total investments in stocks and shares if you want to invest in a cash ISA as well. Banks, including AXA, allow unlimited investments in stocks and shares. However, you will get tax exemption for up to £7,200 only. If you want to make your stocks and shares investments with AXA, you can go to another provider to invest in a cash ISA.

AXA allows you to sell your investments anytime you want. You can sell a part or all of your investments when you need access to money. However, it is better not to sell the investments associated with stocks and shares ISAs, since they are good long-term investments. You should wait for at least five years to realize good returns from your investments. It is better to consult an independent financial advisor before deciding which type of ISA investment you want to make.

AXA ISA: Benefits 

The major advantage of investing in the stocks and shares AXA ISA is enjoying the benefits of investing in the stock markets without having to pay income tax or capital gains tax. However, low rate tax payers are required to pay tax on dividend income. High rate tax payers need not pay taxes on dividends. The major risk is that one might lose money if the stock markets do too badly. However, AXA diversifies its investments across various sectors and geographies to reduce the risks to its investors. Despite having high levels of risk, stock market investments tend to offer reasonable to high returns in the long term.

If you are thinking of investing in an AXA ISA, ensure that you do not sell your investments before five years in order to enjoy maximum returns.


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