ISA countdown - Dec 2008

114 days left to open an ISA with this year's allowance.

If you don't USE IT, you LOSE IT!

On 6th April 2008 the ISA and PEP rules were changed representing the biggest change to ISAs and PEPs since 1999, when ISAs were introduced. The Chancellor also confirmed ISAs are here to stay indefinitely. We welcome these changes:

Main Changes:

  • the ISA allowance has risen from £7,000 to £7,200, you can invest up to £3,600 into a cash ISA and the balance into a stocks and shares ISA, or the full allowance of £7,200 into a stocks and shares ISA
  • PEPs have now been reclassified as stocks and shares ISAs
  • you can transfer Cash ISAs into Stocks and Shares ISAs, but not vice versa
  • the Mini & Maxi ISA distinction has been removed
  • TOISAs (Tessa Only ISAs) have been abolished and will now be Cash ISAs

Most importantly the main tax benefits remain; ISAs will still be free of Capital Gains Tax and any income taken will also be Tax Free. One significant change is that investors with Cash ISAs are now able to transfer these funds into stocks and shares ISAs without affecting your annual allowance.

Example

An individual has a total of £9,000 saved in cash ISAs from previous tax years. They plan to invest their full current year ISA annual investment allowance of £7,200 in a stocks and shares ISA. In the same tax year they could also transfer some, or all, of the £9,000 held in cash ISAs in to any stocks and shares ISA(s) should this be advantageous.

Your attitude towards investment risk would determine what type of ISA would best meet your investment objectives. This would be determined during the free financial review we offer. If you would like to generate additional tax free income or would like the potential of future tax efficient investment growth, please in the first instance, contact Lee Watson or Denis Turnbull on 01228 528081 to arrange a convenient no obligation appointment.

Regulation & Status

O'Reilly Financial Services LLP is a separate legal entity from O'Reilly Chartered Accountants but is wholly owned by the existing partners of O'Reilly Chartered Accountants. O'Reilly Financial Services LLP, of 6-8 Brunswick Street Carlisle Cumbria CA1 1PN is authorised and regulated by the Financial Services Authority. Our FSA register number is 482740. You can check this on the FSA's Register by visiting the FSA website or by contacting the FSA on 0845 606 1234.

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