From July 1, 2014, all ISAs will become New ISAs (NISAs). The new limit will be £15,000 per person per tax year.
You will be able to split the amount you invest in an ISA between a Cash NISA and a Stocks and Shares NISA in whatever way you choose – there will no longer be a restriction on the amount you can pay to a cash ISAs of half the total ISA limit.
You will be able to transfer from a Stocks and Shares NISA to a Cash NISA – previously you could only transfer from a Stocks and Shares ISA to a Cash ISA. You will be able to hold one NISA for both cash and stocks and shares within the same NISA.
It’ll be interesting to see whether Stocks and Shares NISA providers start to offer attractive cash rates to compete with traditional Cash ISA providers.
From April 6, 2014, to June, 2014, the current rules apply. Therefore, you can pay up to £11,880 but not pay more than £5,940 into a Cash ISA. You can top up to the NISA limit from July 1, 2014.
You can only pay into one Cash NISA and one Stocks and Shares NISA per tax year, or choose to pay into one NISA and hold cash and stocks and shares within it.
If you have invested in a Cash NISA between April 6, 2014, and June 30, 2014, and the provider does not allow additional payments to be made, you can transfer to another Cash NISA or Stocks and Shares NISA provider that will allow additional contributions.
The maximum contribution for Junior ISAs will increase to £4,000 from July 1,2014. Those between ages 16 and 18 can contribute to a JISA up to the limit of £4,000, thereafter up to £15,000 in a Cash NISA!
Here’s a brief recap of the benefits of investing in NISAs:
(1) No Capital Gains Tax to pay on investment growth
(2) No personal income tax to pay on income paid out or reinvested
(3) You can fully or partly cash in your NISA at any time without penalty
Please contact Eastwood Financial Services or your own financial adviser if you wish to discuss further.
An adviser will be able to discuss with you investments that match your tolerance of investment risk – remember that Stocks and Shares NISAs don’t have to be invested in shares – they can invest in other ways such as fixed interest investments (such as corporate bonds) and commercial property funds as well.
Please note the following investment risk warnings:
(1) As property is a specialist sector it can be volatile in adverse market conditions and there could be delays in realising your investment.
(2) Property valuation is a matter of judgement by an independent valuer and is therefore a matter of opinion rather than fact.
(3) Equity investments do not provide the same security of capital as a deposit account.
(4) The value of your investment can go down as well as up and you may not get back the full amount invested.