The rules that govern Individual Savings Accounts (ISAs) are due to change from April, 2008.
The government have confirmed their long term commitment to encouraging savers and investors by extending the life of ISAs beyond the original cut off date in 2010. This means that clients can continue to build up funds which are largely free of tax, and in particular can provide tax free income. From next year the maximum annual contribution that can be invested in an ISA will be increased from the current £7,000 to £7,200.
Some of the arcane rules that govern ISAs are to be relaxed, and the distinction between Maxi and Mini ISAs will go. It will also be possible to move mini cash ISAs into equity-based ISAs, although not the other way around.
Clients that have taken a disciplined approach to sheltering the maximum amount of funds in ISAs each year are now looking at a significant part of their wealth outside the savings and investment tax regime.
Funds held on our Mastertrust account can very easily be moved into ISA wrappers. We will be encouraging clients to make sure they have made full use of their allowances before April next year, and then again as soon as possible in the new tax year.