The biggest ever increase in ISA limits!
The announcements in the Budget 2014 included an announcement that from 1 July 2014, ISAs (Individual Savings Account) will be reformed into the 'New ISA' (NISA). From 1 July 2014, the NISA limit will be £15,000, which represents the biggest ever increase in ISA limits.
What is an ISA?
An ISA (short for Individual Savings Account) is a type of savings account. If you save in an ISA, you are entitled to keep all that you receive from that investment and not pay any tax on it. This is not the case with an ordinary bank or building society account, unless you are a non-taxpayer. You pay no tax on any interest or other income you receive from your ISA savings and investments. There are limits to the amount you can invest in an ISA per tax year, and these are set to increase significantly as from 1 July 2014.
New ISA limit
As from 1 July 2014, your existing ISA will automatically become a NISA, with an overall NISA limit of £15,000, and will offer you an option to either save your whole allowance of £15,000 in cash, stocks and shares, or any combination of the two. This means that from 1 July you could invest £15,000 into a cash NISA, and nothing in a Stocks and Shares NISA.
Make sure you take advantage of your new tax free savings limits.
If you have any questions about your NISA limits, please don't hesitate to contact us.