ISA – The Tax Optimising Investment Tool
ISA changes
In the 2007 Budget, the government announced a number of changes to Individual Savings Account (ISA) and Personal Equity Plan (PEP) regulations, which came into effect on 6 April 2008. The changes include higher contribution limits, the removal of the distinction between “mini” and “maxi” ISAs, the opportunity to switch money from cash ISAs into Stocks & Shares ISAs and the transfer of any funds invested in PEPs into ISAs.
New Investment Limits
| Cash | Stocks & Shares | Maximum annual allowance |
|---|---|---|
| Up to £3,600 | Up to £7,200 | £7,200 |
The annual ISA investment allowance increased to £7,200 per tax year. Up to £7,200 can be invested in a Stocks & Shares ISA. Alternatively, up to £3,600 of the allowance can be saved in cash with one ISA provider and the remainder of the £7,200 can be invested in a Stocks & Shares ISA with the same or another provider. There are now just Cash ISAs and Stocks & Shares ISAs subject to the investment limits shown above. The Mini and Maxi distinction has gone.
You can transfer money from cash ISAs into Stocks & Shares ISAs
The new regulations will allow you to transfer money held in a Cash ISA (including cash held in TOISA accounts) into a Stocks & Shares ISA without affecting your annual ISA allowance. You will be able to transfer some or all of the cash accumulated over the years into Stocks & Shares for greater growth potential over the longer term. It should be noted, however, that any funds from a Cash ISA invested in a Stocks & Shares ISA cannot be transferred back into a Cash ISA and the value of a Stocks & Shares ISA and any income from it can go down as well as up.
Your PEPs have become ISAs
PEPs ceased to exist on 6 April 2008 and all existing PEP accounts automatically became Stocks & Shares ISAs governed by the same set of rules.
Do you need to take any action?
You do not need to take any action if your PEP or ISA portfolio is already managed by Lindsays. We have made all the changes for you.
If you hold any PEPs or ISAs with another provider, you may wish to consolidate your investments by bringing them into your Lindsays portfolio. This should make it easier for you to review your portfolio as a whole. Please note that your existing provider may charge an exit or transfer fee.
Would you like more information?
At Lindsays, we provide advice on a wide range of investment opportunities tailored to your specific needs. We take your aims and the levels of risk you are willing to accept into consideration in order to construct a portfolio that reflects your personal preferences.
We will be happy to answer any questions you may have regarding the changes.
Where can I find out more?
Contact one of the members of our team, as noted below.
Lindsays is authorised and regulated by the
Financial Services Authority.