ISA Changes 2008-9
What are my ISA investment options from 6 April 2008?
From 6 April 2008 you will be able to invest in one cash and one stocks and shares ISA each tax year. The annual ISA investment allowance will rise to £7,200 per tax year. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder can be invested in a stocks and shares ISA with any provider.
Subscription limits for 2008-9 tax year
Amount you can invest | |
|---|---|
Cash | up to max of £3,600 |
Stocks & Shares (Including With Profits) | up to max of £7,200 |
Where you subscribe to both a cash ISA and a stocks and shares ISA, the total amount subscribed must not exceed the overall subscription limit of £7,200.
So for example, you could subscribe:
- £3,600 to a cash ISA and £3,600 to a stocks and shares ISA
- £2,000 to a cash ISA and £5,200 to a stocks and shares ISA
- Nothing to a cash ISA and £7,200 to a stocks and shares ISA
We want you to choose the right ISA for you but we understand this can be a little daunting, we can provide financial advice to help you make choices appropriate to your circumstances.
What will happen to existing ISAs?
Mini cash ISAs, Tessa Only ISAs (TOISAs) and the cash component of a maxi ISA will all be reclassified as 'Cash ISAs'. Mini stocks and shares ISAs, and the stocks and shares components of any Maxi ISAs will be reclassified as 'Stocks and Shares ISAs'.
How much can you transfer from a cash ISA to a stocks and shares ISA?
From 6 April 2008 you will be able to transfer some or all of the money you have saved in previous tax years without affecting your annual ISA allowance. Savers will also be able to transfer money saved in the current tax year. Such transfers must be the whole amount saved in that tax year in that cash ISA up to the day of the transfer. These transfers are subject to the terms and conditions of the ISA providers.
How do you transfer the money in your cash ISA to a stocks and shares ISA after 6 April 2008?
In exactly the same way as you would transfer this ISA to another provider, you will need to select your stocks and shares ISA provider. This can be your existing provider if they offer a stocks and shares ISA, or a new one. Ask the new provider to arrange the transfer. Remember, however, that you must not withdraw the money and invest it in a stocks and shares ISA yourself, as it will count against your annual ISA investment allowance.
Will you have to sign any new forms to continue paying into your ISA?
No. As long as you have saved in that ISA in the previous tax year, signed a continuous application form for that ISA, and have not already saved in another ISA of the same type (cash or stocks and shares) during the tax year.
What are the main changes?
- The annual ISA investment allowance will be raised to £7,200. (For monthly savers this will mean that they will be able to save up to £600 per month)
- Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in stocks and shares with either the same or a different provider
- ISA savers will be able to invest in two separate ISAs each tax year; a cash ISA and a stocks and shares ISA. Mini and Maxi ISAs will no longer exist
- Mini cash ISAs TESSA-only ISAs (TOISAs) and the cash component of a Maxi ISA will automatically become Cash ISAs
- Mini stocks and shares ISAs and the stocks and shares component of a Maxi ISA will automatically become Stocks and Shares ISAs
- All Personal Equity Plans (PEPS) will automatically become Stocks and Shares ISAs
- ISA savers will be able to transfer money saved in their Cash ISA to their Stocks and Shares ISA
