Investments
ISAs
How much can I invest?
From October 6 2009 the ISA allowance for everyone aged 50 and over prior to the 5 April 2010 has risen from £7,200 to £10,200. The extra allowance can be either invested in a stocks & shares ISA or split evenly between a stocks & shares and a Cash ISA.
Isas were introduced in April 1999, so those who have made full use of their annual allowances every year since then, will have sheltered £79,400 from the taxman - including the new 2009-2010 allowance.
What else is changing?
Maxi and mini ISA’s have been abolished. Existing mini cash, Tessa-only ISA’s and the cash component of maxi Isas will be re-classed as cash ISA’s. In the same way, mini stocks and shares ISA’s and the stocks and shares component of
Maxi ISA will be re-classified as stocks and shares ISA’s.
Personal equity plans (PEP’s) will become stocks and shares ISA’s.
How many ISA’s can I have?
You can open one cash ISA and one stocks and shares ISA each tax year. Up to £3,600 can be invested in a cash ISA. The remainder of your £7,200 allowance can be invested in a stocks and shares ISA. You do not have to put any money in a cash ISA: instead the full £7,200 can be invested in a stocks and shares account.
Various non-cash assets can be held within a stocks and shares ISA. These include unit trusts, open-ended investment companies, investment trusts, exchange traded funds, shares or bonds.
Can I switch between cash and equities?
As a result of the rule changes, savers who initially invested in a cash ISA can transfer that money into a stocks and shares account. However, you cannot move from equities into cash.
Are all cash ISA’s the same?
No. Cash ISA’s are like any other savings account and there are a number of different types - easy access, fixed rate and notice accounts.
Investment section links:
investment strategies | ISAs | offshore investments | insurance bonds | unit trusts | open ended investment company (OEIC)
Can I transfer money I have invested in previous tax years?
Yes, you can transfer money without losing the tax-free status. However, you do need to be careful - if you close your existing ISA down and then look to move the money into another one you will lose the tax-break. You therefore need to make sure that your current provider treats it as a transfer and not an account closure.
Not all cash accounts accept transfers however, so this is something worth bearing in mind when comparing deals.
If you have money in a stocks and shares ISA, you can also change your underlying investments without losing the tax-break.
Can I switch between cash and equities?
As a result of the rule changes, savers who initially invested in a cash ISA can transfer that money into a stocks and shares account. However, you cannot move from equities into cash.
