My £8m ISA account *

[monabri]

https://www.telegraph.co.uk/investing/i ... s-one-year

(Pay walled but you can get the drift from the following)

"The number of Isa millionaires has nearly tripled in just a year as savers reap the rewards of long-term investing.

HM Revenue and Customs data shows that as of April 2021, 4,070 savers had a million pounds or more stowed in the tax-free wrapper, compared to 1,480 in the 2019-20 tax year. There were just 450 Isa millionaires in 2015-16.

The top 50 Isa millionaires were sitting on average pots of £8,509,000, according to the data, which was obtained following a freedom of information request on behalf of financial services network the Openwork Partnership. The average Isa millionaire pot was £1,397,000."

I wonder what strategy the top 50 followed?

(Best not to discuss politics...just confine the discussion to the strategy )

ps how do HMRC actually know about non declared accounts or do they know 'everything' ?

* (my £8m ISA...I wish!)

[Alaric]

ps how do HMRC actually know about non declared accounts or do they know 'everything' ?

Don't they get regular statistics from ISA providers?

[Lootman]

ps how do HMRC actually know about non declared accounts or do they know 'everything' ?

Don't they get regular statistics from ISA providers?

They would certainly get info about annual subscriptions, to check that people do not over-subscribe.

I can think of no reason why they would need to get valuations however. Perhaps so the Treasury knows how much tax is being avoided by the use of them?

And I assume they must be able to read across multiple accounts belonging to the same person?

[Spet0789]

https://www.telegraph.co.uk/investing/isas/number-isa-millionaires-nearly-triples-one-year

(Pay walled but you can get the drift from the following)

"The number of Isa millionaires has nearly tripled in just a year as savers reap the rewards of long-term investing.

HM Revenue and Customs data shows that as of April 2021, 4,070 savers had a million pounds or more stowed in the tax-free wrapper, compared to 1,480 in the 2019-20 tax year. There were just 450 Isa millionaires in 2015-16.

The top 50 Isa millionaires were sitting on average pots of £8,509,000, according to the data, which was obtained following a freedom of information request on behalf of financial services network the Openwork Partnership. The average Isa millionaire pot was £1,397,000."

I wonder what strategy the top 50 followed?

(Best not to discuss politics...just confine the discussion to the strategy )

ps how do HMRC actually know about non declared accounts or do they know 'everything' ?

* (my £8m ISA...I wish!)

Probably picked the right few stocks. If you’d put your ISA into Microsoft every year I expect you’d have got there.

[Dod101]

£8 million plus in an ISA or ISAs is some going though. They must have had more than one ten bagger surely and everything in them ? What is the possible maximum subscription I wonder from back in the days of PEPs?

Dod

[Lootman]

£8 million plus in an ISA or ISAs is some going though. They must have had more than one ten bagger surely and everything in them ? What is the possible maximum subscription I wonder from back in the days of PEPs?

It was £3,000 when they started out. UK shares only.

I have maxxed out PEP and ISA subscriptions since inception in 1987. Mine is worth about a million. 8 million implies to me investing in a few smallcaps that worked out.

[Dod101]

£8 million plus in an ISA or ISAs is some going though. They must have had more than one ten bagger surely and everything in them ? What is the possible maximum subscription I wonder from back in the days of PEPs?

It was £3,000 when they started out. UK shares only.

I have maxxed out PEP and ISA subscriptions since inception in 1987. Mine is worth about a million. 8 million implies to me investing in a few smallcaps that worked out.

If we are in confession mode my ISAs are around £800,000 and I did not start subscribing until the year 1994/5 but I think I have maxxed out each year since then. I was overseas before that. None are or ever have been cash ISAs.

£8 million is an astonishing figure.

Dod

[BullDog]

For certain that person didn't buy rubbish like Interserve, Carillion, Patisserie Valerie, Vodafone, Petrofac, BT etc.....

[mc2fool]

This seems to be a regular recurring topic, although of course the number keeps on going up.

Becoming an ISA Millionaire viewtopic.php?p=4658#p4658
Another Isa millionaire viewtopic.php?p=55074#p55074
Article in Telegraph on ISA Millionaires viewtopic.php?p=206364#p206364
"The secrets of the ISA millionaires" viewtopic.php?p=389385#p389385

And probably a few others the search missed....

[Howard]

It's an interesting phenomenon. Even for us more modest investors.

Starting investing many years ago and getting an annual total return of a modest 8% tax free, every 100k invested turns into a million after a while.

What's interesting me now is how one turns from accumulating wealth into divesting it. Even after making strenuous attempts to spend/give it away.

Or just letting IHT take 40%?

It must be even more of a puzzle if one has accumulated £8 million.

regards

Howard

[monabri]

£8 million plus in an ISA or ISAs is some going though. They must have had more than one ten bagger surely and everything in them ? What is the possible maximum subscription I wonder from back in the days of PEPs?

Dod

https://www.fool.co.uk/investing-basics ... llowances/


I've not totted up the combined allowances (because I'm not at my desk computer).

[Dod101]

It's an interesting phenomenon. Even for us more modest investors.

Starting investing many years ago and getting an annual total return of a modest 8% tax free, every 100k invested turns into a million after a while.

What's interesting me now is how one turns from accumulating wealth into divesting it. Even after making strenuous attempts to spend/give it away.

Or just letting IHT take 40%?

It must be even more of a puzzle if one has accumulated £8 million.

regards

Howard

I wonder how many people have managed to compound at 8% per annum, year on year? I certainly have not.

Dod

[BullDog]

It's an interesting phenomenon. Even for us more modest investors.

Starting investing many years ago and getting an annual total return of a modest 8% tax free, every 100k invested turns into a million after a while.

What's interesting me now is how one turns from accumulating wealth into divesting it. Even after making strenuous attempts to spend/give it away.

Or just letting IHT take 40%?

It must be even more of a puzzle if one has accumulated £8 million.

regards

Howard

I wonder how many people have managed to compound at 8% per annum, year on year? I certainly have not.

Dod

Not me.

Terry Smith has at Fundsmith since launch, IIRC over 12 years ago. I think last year was the only negative year. I think he's managed double figure return on an annualised basis.

[Dod101]

£8 million plus in an ISA or ISAs is some going though. They must have had more than one ten bagger surely and everything in them ? What is the possible maximum subscription I wonder from back in the days of PEPs?

Dod

https://www.fool.co.uk/investing-basics ... llowances/


I've not totted up the combined allowances (because I'm not at my desk computer).

A rough tally takes me to around £270,000 and most of that in the last 10/12 years plus of course the years pre 1999/2000. There were only modest subs each year in those days so maybe another £30,000? To convert that into £8 million is as I said astonishing.

Dod

[monabri]

https://www.fool.co.uk/investing-basics ... llowances/


I've not totted up the combined allowances (because I'm not at my desk computer).

A rough tally takes me to around £270,000 and most of that in the last 10/12 years plus of course the years pre 1999/2000. There were only modest subs each year in those days so maybe another £30,000? To convert that into £8 million is as I said astonishing.

Dod

(back at my computer which has Excel)

I've added in the PEP allowances (General & Single) based on the information in the article. Then I've added another couple of years to the ISA allowances to include the current year. Surprisingly, the figure is close on £400k. So, getting to £1m would be achievable for "pot growers" but £8m is a stretch!

[Howard]

It's an interesting phenomenon. Even for us more modest investors.

Starting investing many years ago and getting an annual total return of a modest 8% tax free, every 100k invested turns into a million after a while.

What's interesting me now is how one turns from accumulating wealth into divesting it. Even after making strenuous attempts to spend/give it away.

Or just letting IHT take 40%?

It must be even more of a puzzle if one has accumulated £8 million.

regards

Howard

I wonder how many people have managed to compound at 8% per annum, year on year? I certainly have not.

Dod

I was lucky in the 90s with a substantial initial investment, then using Mrs H and my PEP and ISA allowances and a SIPP. Two years of + 40% growth (93 and 99) and other years around + 15% (Those were the days for amateur investors often just using a couple of brilliant tip sheets!).

Of course, 2001 and 2002 were disasters then steady growth of average 17% pa up to another bad year in 2008 (down 30%). However 2009, 2010 and 2013 were kind at plus 25%, 17 % and 24%. After that I reduced small cap exposure, let Terry Smith handle a major slice of the portfolio and moved quite a bit into US orientated ETFs, including EQQQ which tracked the Nasdaq.

So average growth from early 90s to the end of 2021 was just over 8.5% pa after tax. To be honest I’ve been lazy and haven’t updated since then - must get round to it.

The big drops in the early 2000s and 2008 made me realise that after good years it was wise to move significant parts of the portfolio to less volatile investments like ETFs and accept a lower but safer growth rate.

Of course, if only I’d moved our investments to cash before big falls, not sold Asos just before it more than 10 bagged and ……. we might be closer to holding much bigger ISAs. And even more worried about IHT.

regards

Howard

PS The best investments, of course, are substantial gifts to others. They appreciate in value and never go down.

[monabri]

PS The best investments, of course, are substantial gifts to others. They appreciate in value and never go down.

I'll send you my bank account details !!!

[Steveam]

I see conversations like this and think of it as painting a (tax) target on our backs. The Chancellor will surely be balancing the tax opportunities against the likely vote losses. I’m seeing ISAs as a clear and easy target for the next (probably Labour) government. At a philosophical level I’m relaxed about the likely taxation as I think they (ISAs) have outlived their early purpose - they have morphed from a vehicle to encourage saving to a tax avoidance vehicle. If they are taxed I’ll scream like the proverbial stuck pig but that’s life.

Best wishes, Steve

[Howard]

I see conversations like this and think of it as painting a (tax) target on our backs. The Chancellor will surely be balancing the tax opportunities against the likely vote losses. I’m seeing ISAs as a clear and easy target for the next (probably Labour) government. At a philosophical level I’m relaxed about the likely taxation as I think they (ISAs) have outlived their early purpose - they have morphed from a vehicle to encourage saving to a tax avoidance vehicle. If they are taxed I’ll scream like the proverbial stuck pig but that’s life.

Best wishes, Steve

You could be right. However I knew a couple of senior tax inspectors and chatted to them about ISAs. They took the view that they were a simple vehicle for tax payers to use which needed no (tax) administration by either tax payer or HMRC. As such they saved the significant costs of administration of millions of taxpayers paying, or trying to avoid paying, tax on a large range of investments. They implied that it was relatively easy to check on people playing by the rules using returns from stockbrokers etc.

So maybe, apart from the big amounts reclaimable from a relatively few multi million pound ISAs, (whose owners could immediately afford the costs of setting up complex tax avoidance schemes or moving investments offshore) the returns from making everyone pay tax on ISAs might be offset by complexity and massive admin costs?

We may be lucky?

regards

Howard

[Hypster]

I've added in the PEP allowances…

Thanks for this. I also seem to recall you could roll a TESSA into an ISA, known as TOISAs, but I don’t remember if there were contribution limits on a TESSA. I think John Major introduced TESSAs when he was briefly chancellor.