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New tax year, new ISA rules

The start of the new tax year on 6 April brought with it a range of changes to ISAs designed to make the system much simpler and more flexible for savers. Here is a summary of what has changed.

Increases to subscription limits

You can now subscribe more to your ISA and so increase your tax efficient savings. The overall subscription limit has risen from £7,000 to £7,200. You can invest the full amount in a Stocks and Shares ISA, or up to £3,600 in a Cash ISA and the remainder in a Stocks and Shares ISA.

Bringing PEPs within the ISA wrapper

From 6th April all PEP accounts became Stocks and Shares ISAs and are subject to ISA rules. You can now invest your full annual ISA allowance in this re-labelled PEP as long as you haven’t subscribed to another Stocks and Shares ISA during the same tax year.

Removing the mini/maxi distinction

The Mini and Maxi distinction which was a feature of the old system has been removed. This means that you will have Stocks and Shares ISA and/or a Cash ISA. You can subscribe to either or both types within the same tax year provided you remain within the overall contribution limits.

Transferring a Cash ISA to a Stocks and Shares ISA

You can now transfer from a Cash ISA to a Stocks & Shares ISA, but not the other way around. This is means you can diversify your assets and benefit from potentially higher returns offered by stocks and shares over the medium to long term. We will accept transfers from Cash ISAs held either with us or with other ISA managers.

Make the most of your tax efficient savings

Remember with an ISA you don’t have to pay any Capital Gains Tax on your investments or pay any additional tax on income, and you don’t have to mention it on your tax return. An ISA from Alliance Trust Savings offers you a wide investment choice, no set up or annual charges and excellent customer service. What’s more, our online dealing service provides you with immediate access to the markets, up to date valuations and free research tools.

So why not transfer any ISAs you have with other managers to us?* We will look after the paperwork for you while you enjoy all the benefits an Alliance Trust ISA has to offer. Just call us on 08000 326323 to request a transfer form or click here and download one yourself.

Please note the tax status of ISAs is not guaranteed and is subject to change. The basis of taxation can change and the value of any tax advantages will depend on your individual circumstances.

* Transferring an ISA may affect the value of your Plan. Before exiting, you should assess the total charges you would incur in transferring your ISA to us.