Investment trust ISAs: the chancellor has now confirmed that ISAs have a long-term future, so investment trust investors should consider using a tax-efficient ISA wrapper to enhance their returns

What Investment, Jan, 2007

Chancellor Brown confirmed in his pre-Budget statement at the beginning of December that Individual Savings Accounts (ISAs) were to continue beyond their original cut-off date of 2010. This is good news for private investors. ISAs allow them to put up to 7,000 [pounds sterling] a year into an investment 'wrapper' and pay no income tax on the dividends they receive and no CGT on any gains.

Investment trusts and their management houses were quick to realise the advantages of ISAs for their private investor shareholders, and most have established ISAs that run alongside their more general savings schemes. Details vary, but most have minimum investment levels of 50 [pounds sterling] or 100 [pounds sterling] for regular savings and 500 [pounds sterling] or 1,000 [pounds sterling] for lump sums. Charging structures can also vary significantly, with some schemes levying an initial charge (although the majority do not) and most making some sort of annual administration charge, as either a fixed sum or a percentage of the investment. There may also be dealing charges on top of this.

In general, most management groups' investment trust ISA plans are linked to the investment trust portfolios they manage, although a few, most notably the schemes administered by Alliance Trust Savings, will also give access to other trusts. Investors should look at the details of a particular ISA scheme to see if it meets their particular requirements. The details of the in-house ISA schemes offered by investment management houses that run investment trust portfolios are set out below.

Investment trust companies offering ISAs

All schemes detailed below are maxi ISAs

ABERDEEN ASSET MANAGERS

Contact: 0500 000 0400

Minimum investment: Monthly 100 [pounds sterling]; lump sum 1,000 [pounds sterling].

Charges: 24 [pounds sterling] annually. Nil initially. Selling 15 [pounds sterling]-10 [pounds sterling] per sale for switches.

Mini ISA available: Yes

ALLIANCE TRUST SAVINGS

Contact: 08000 326 323

Minimum investment: Monthly 50 [pounds sterling], lump sum 50 [pounds sterling]

Charges: Purchases--2.50 [pounds sterling]-15 [pounds sterling] (plus 0.2%); Sales 15 [pounds sterling]-30 (plus 0.2%)

Mini ISA Available : Yes

ALLIANZ GLOBAL INVESTORS

Contact: 0207 065 1407

Minimum investment: Monthly 50 [pounds sterling]--max three trusts; lump sum 1,000 [pounds sterling] (top up 500 [pounds sterling])

Charges: Annually 30 [pounds sterling]. Dealing 0.5%.

Mini ISA available: No

ASSET VALUE INVESTORS

Contact: 0845 850 01 81

Minimum investment: Monthly 100 [pounds sterling], lump sum 1,000 [pounds sterling]

Charges: Initially 30 [pounds sterling], annually 0.5%, sales charge 15 [pounds sterling] min, by telephone, or 11.95 [pounds sterling] online.

Mini ISA available: Yes

AUGUST EQUITY (through Allianz Global Investors)

Contact: 0207 065 1407

Minimum investment: Monthly 50 [pounds sterling]; lump sum 1,000 [pounds sterling]

Charges: Annually 30 [pounds sterling]. Dealing 0.5%.

Mini ISA available: No

BAILLIE GIFFORD SAVINGS MANAGEMENT

Contact: 0800 917 2112

Minimum investment: Monthly 250 [pounds sterling]; lump sum 2,000 [pounds sterling] (1,000 [pounds sterling] per trust)

Charges: Initially nil; annually 30 [pounds sterling]. Switching 20 [pounds sterling] (first switch free) Transfers out 30 [pounds sterling]. Withdrawals 20. [pounds sterling]

Mini ISA available: Yes

BARING ASSET MANAGEMENT

Contact: 0207 214 1900

Minimum investment: Monthly 250 [pounds sterling] lump sum 3,000 [pounds sterling]

Charges: No initial or annual charge. Dealing charge of 0.2% on purchases and sales for monthly savings, 20 [pounds sterling] for lump sums

Mini ISA available: Yes

BLACKROCK INVESTMENT MANAGERS

Contact: 0800 44 55 22.

Minimum investment; Monthly 50 [pounds sterling]; lump sum 1,000 [pounds sterling]

Charges: Nil initially, 0.5% annually; 1.25% dealing. Switching 1%. Transfers 1% (min. 250 [pounds sterling])

Mini ISA available: No

BLUEHONE INVESTORS (through F&C)

Contact: 0800 136 420

Minimum Investment: Monthly 50 [pounds sterling], lump sum 500 [pounds sterling]

Charges: No initial or dealing charges. 60 [pounds sterling] annual fee.

Mini ISA available: Yes

CALEDONIA INVESTMENTS

Contact: 0207 556 8800

Minimum Investment: Monthly 50 [pounds sterling], lump sum 500 [pounds sterling] (top up 250 [pounds sterling])

Charges: Initially nil, annually 20 [pounds sterling] for monthly savings, 15 [pounds sterling] for lump sums. Dealing charges purchase 0.5% (min. 1.50 [pounds sterling] for monthly savings and 15 [pounds sterling] for lump sums). Sales 1% (minimum 15 [pounds sterling]). Transfers out 40 [pounds sterling]

Mini ISA available: Yes

CLOSE INVESTMENTS

Contact: 0845 600 1213

Minimum investment: Monthly 100 [pounds sterling]; lump sum 1,000 [pounds sterling] (top up 100 [pounds sterling])

Charges: No initial or annual charge, 1% dealing (maximum 50 [pounds sterling]). Transfers out 30 [pounds sterling]

Mini ISA available: Yes

DUNEDIN (through Aberdeen Asset Managers)

Contact: 0500 000040

Minimum investment: Monthly 100 [pounds sterling]; lump sum 1,000 [pounds sterling]