New ISAs - what's changing in July 2014?
In the recent Budget the Chancellor promised to increase the 'simplicity, flexibility and generosity' of ISAs.
What is the New ISA?
In the recent Budget the Chancellor promised to increase the 'simplicity, flexibility and generosity' of ISAs. As a result, there will now be a single ISA which has been named the new ISA (or 'NISA') which gives you a bigger tax break than ever before and more flexibility about how you can use them.
What are the key changes?
The key changes that will be brought in include:
- New ISA allowance - The ISA allowance rises to £15,000
- A single New ISA allowance for both cash and investment
- Improved flexibility - Savers will be able to divide their ISA allowance between cash ISA and stocks and shares ISAs in whatever proportion they wish. This is especially welcome news for people who want to use their entire ISA allowance for cash savings.
- Increased ISA transfer potential - Savers will be able to transfer from a stocks and shares ISA to a cash ISA, or the other way around. Previously, transfers from stocks and shares ISAs to cash ISA were not permitted.
- Higher Junior ISA limit - The limit for junior ISAs will rise to £4,000
New ISA key benefits
- Protect up to £15,000 from tax (£30,000 for a couple), with limits set to increase each year
- You pay no capital gains tax on the returns from your ISA
- No need to declare ISAs on your tax return