From 1 July 2014 all ISAs become new ISAs (NISAs). This applies to all existing ISAs and to new accounts opened after I July 2014. the government is changing the name to reflect the significantly increased limits that will be available to account holders.
The NISA will be more generous and will offer flexibility to save your NISA annual allowance of £15,000 in cash or shares or any combination of the two. Under the NISA rules you will also be able to transfer previous years’ ISA savings freely between shares and cash if you wish.
For those interested in history Individual Savings Accounts (ISAs) were introduced in April 1999. They replaced TESSAs and PEPs and are effectively a tax wrapper within which investors may hold a range of different investments. The big advantage of ISA is that interest & capital gains are tax-free: gains on investments held outside an ISA are liable to income tax and/ or capital gains tax.
Savers can invest up to £15,000 in the tax year 2014/15. It is important to use as much of your annual allowance as you can each tax year as it cannot be carried over into the next financial year.
Since the introduction of tax free savings in April 1999 those who have made full use of their annual allowances every year will have sheltered over £150,000. That figure doesn’t include capital growth, so many people will have ISA investments worth far more than that, depending on where their money is invested.
Various non-cash assets can be held within a stocks and shares ISA. These include unit trusts, open ended investment companies (OEICS) investment trusts, exchange traded funds, shares or bonds.
Contact Us for independent financial advice on all aspects of NISA savings, investment and wealth management.