4 February 2008 [0 comments]

Q: 

My individual savings account (ISA) and personal equity plan (PEP) investments are held in Barclays Stockbrokers’ nominee services. During a recent reshuffle of my bank details, the dividends, which until that time had been paid regularly into my nominated bank account, were not paid and were held within my ISAs and PEPs. The interest thereon, plus the proceeds from an enforced sale, then became subject to a tax charge, as Barclays Stockbrokers said that cash could not be held within ISA/PEP accounts. The sums were not on hold for a long period, only a matter of weeks, and as a tax-free vehicle it seems petulant to impose tax. Had these been reinvested, no tax would have been due, so why should tax have to be paid on interest?

In addition, when I first opened this account I bought shares in three AIM-listed companies. This was done on the internet using Barclays Stockbrokers’ buying ‘engine’, which permitted me to buy these stocks. A few months later I was told that the Treasury does not permit AIM stocks to be held in ISAs. This enforced the sale at a time I would not have chosen to sell. Is this a new regulation? Barclays’ ‘engine’ should surely have been set up not to accept AIM-listed companies. Another stock I held reverted to listing on AIM, forcing me to sell this one too. Surely this is totally restrictive and contrary to the intention of the ISA beast?
Pat Lean, via email

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