ISA Rule Changes - Hot Topics Q & A

Q. I have heard that the rules for Individual Savings Accounts are changing from 6 April 2008. Can you tell what the main changes are please?

A. Yes, you are right, ISA rules are changing from 6 April 2008.

In summary, from that date: 

- The annual ISA investment allowance will be raised to £7,200. 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 (but not vice versa).

For a full explanation, we recommend you read the full guide at HMRC's website

The OLD rules that govern ISAs up to 5 April 2008 can be read here:

We hope this helps you make the right decisions regarding your next ISA investments!