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ISA Rule Changes for the new Tax Year
Changes to ISA’s & PEP’s
From the 6th April 2008 there will be some very significant changes to the rules of ISA’s and PEP’s.
Contribution limits
The total contribution limit will increase to £7,200, which up to £3,600 can be held in cash.
Changes to ISA's
The distinction between a Mini ISA and Maxi ISA will be removed.
Investors will simply have one ISA per tax year, in which they may choose to hold either:
A combination of cash (maximum £3,600) and Stocks and Shares (up to the overall £7,200 limit)
or
A Stocks and Shares ISA up to the annual limit of £7,200.
Change to PEP’s
All PEP’s will be reclassified as Stocks and Shares ISA’s.
Transfers of Cash ISA’s / TO ISA’s
Under the new rules you will be able to transfer some or all of the value of your Cash ISA’s or TO ISA’s from previous tax years into Stocks and Shares ISA’s without affecting your annual ISA investment allowance.
Customers subscribing to a Cash ISA after 6th April 2008 may also transfer this into an Investment ISA, but if the transfer takes place in the same year as the Cash ISA was taken out, it will count towards their subscription for that year.
The process for transferring from a Cash ISA to Stocks and Shares ISA is the same for current transfers, i.e. a transfer form is completed and sent to us.
Please note that the First Place Financial Ltd does not offer investment into the Cash component on ISA’s.
What does this mean?
Example 1
Invest £3,600 in cash with your bank/building society and invest £3,600 in Stocks and Shares via our website.
Example 2
Invest £1,000 in cash with your bank or building society and invest £6,200 in Stocks and Shares via our website.
Example 3
Invest £7,200 in Stocks and Shares. Important Notice: You cannot switch Stocks and Shares ISA’s back into Cash ISA’s at any time.
ISA’s / PEP’s held by different providers
Clients holding ISA’s / PEP’s with different providers should receive details from each individual fund manager explaining how the changes will be made.
