ISA Changes

Changes to the ISA rules from April 2008

The government have changed the rules on ISAs from 6th April 2008 aiming to make them simpler and more flexible.

The new limits

Your annual ISA investment allowance will rise to £7,200.

There will no longer be Mini and Maxi ISAs. ISA customers will continue to be able to invest in either a cash ISA or a stocks and shares ISA or both.

Up to £3,600 can be saved in a cash ISA and the remainder of the £7,200 can be invested in a stocks and shares ISA. The following table shows how your allowance could be used from April 2008.

Cash ISA	Stock and Shares ISA	Total ISA Allowance
£1,200	£6,000	£7,200
£3,000	£4,200	£7,200
£3,600 (maximum cash allowance)	£3,600	£7,200
£0	£7,200 (maximum stocks and shares allowance)	£7,200

 

Transferring money from April 2008

As well as being able to invest your full ISA allowance of £7,200 in a stocks and shares ISA, you can also transfer some or all of the money held in previous tax year cash ISAs into a stocks and shares ISA. A stocks and shares investment is a long term investment and although you can take out money you should look to invest for at least 5 years, making sure you have other savings to meet your short term needs. Please note that the rules will not allow you to transfer funds from a stocks & shares ISA to a cash ISA.

PEPs and Child Trust Funds

All PEP accounts from 6th April 2008 will become stocks and shares ISAs and will be subject to the new ISA rules. It will also be possible to rollover Child Trust Fund accounts into an ISA on maturity.

More Information

If you feel that you would like more information about the new ISA limits why not pop into branch and speak to an Adviser.