The Chancellor, George Osborne has changed the rules for ISA’s , here’s a quick summary of the new ISA rules from 1 July 2014.
New ISA limit
The ISA allowance will rise to £15,000 on 1 July 2014 from £11,880.
Under the new rules you will be able to split the ISA allowance between the New Cash ISA and New Stocks & Shares ISA in whatever combination you chose, currently if you want to hold your money in cash, then only ½ of your allowance can be utilised for this purpose, the balance of your allowance should you want to use it must have been used to invest in Stocks and Shares.
Improved transfer options
From July you will be able to transfer from your Stocks & Shares ISA’s to a Cash ISA, and vice versa. Under the old rules you could only transfer from a Cash ISA to a Stocks & Shares ISA.
Tax-free interest in Stocks & Shares ISAs
It has always been possible to hold cash in a Stocks & Shares ISA, but any interest is in effect paid net of basic rate tax. From July any interest received from holding cash in a New Stocks & Shares ISA will be completely tax-free.
From 1 July 2014 the limit for the new Junior ISA’s will be increased to £4,000.
As always if you would like any help in deciding how to utilise your ISA allowance, then please do contact a member of the team.