From 1 July 2014, ISAs (Individual Savings Accounts) were reformed into a new and simpler product. This change was announced in the March 2014 Budget when the Government unveiled the ‘New ISA’ (NISA), a move that represents the biggest-ever increase to ISA limits.
The NISA annual limit is now £15,000. The key features worth noting are:
Improved flexibility – the new rules mean you can split your ISA allowance as you wish between a New Cash ISA and New Stocks & Shares ISA. Previously, you could only save up to half the ISA allowance in a Cash ISA.
Improved transfer options – you can transfer from a Stocks & Shares ISA to a Cash ISA, and vice versa subject to the ISA provider’s agreed terms and conditions. Under previous rules you could only transfer from a Cash ISA to a Stocks & Shares ISA.
Tax-free interest in Stocks & Shares ISAs – you have always been able to hold cash in a Stocks & Shares ISA, but any interest is in effect paid net of basic rate tax. Under the new rules interest on cash held in a New Stocks & Shares ISA is completely tax-free.
This is good news for hard-pressed savers. Because you can put up to £15,000 in each year, you’ll be able to quickly protect a greater amount of money in a tax-free savings pot.
Simply Money; summer Edition 2014
