As you may know, changes to the structure of PEPs and ISAs from 6 April 2008 aim to remove any confusion associated with these schemes, and provide savers with more certainty and flexibility.
Q. What has changed?
Q. How have ISAs been reclassified?
Both types of ISA will be available indefinitely with no set end date. If you wish, you can invest in both a Cash ISA and a Stocks and Shares ISA in the same tax year.
Q. What has happened to the PEP scheme?
All PEPs have been reclassified as Stocks and Shares ISAs and are now subject to the ISA rules.
Q. What are the new subscription limits?
The annual subscription limit is now £7,200. Investors may use their entire allowance to invest in the Stocks and Shares ISA. Alternatively, investors will be able to save up to £3,600 of their allowance in a Cash ISA with one provider. The remainder of the £7,200 can be invested in a Stocks and Shares ISA with either the same or a different provider.
Q. Can I transfer monies from my Cash ISA to a Stocks and Shares ISA?
Yes. Under the new rules you can transfer some or all of the money you invested in Cash ISAs over previous years into a Stocks and Shares ISA without affecting your annual subscription limit.
Q. Can I transfer monies from my Stocks and Shares ISA to a Cash ISA?
No. You are able to transfer monies from a Cash ISA to a Stocks and Shares ISA, but not vice versa.
Q. Can I invest in more than one ISA each tax year?
Yes. You may invest in two separate ISAs each April to April tax year – one Cash ISA and one Stocks and Shares ISA, subject to the annual subscription limits. Your Cash ISA and your Stocks and Shares ISA can be with the same or different providers.
Q. Where can I find more information about the Government changes?
To find out more, please visit the HM Revenue & Customs website at www.hmrc.gov.uk/isa/ (opens new window). Alternatively, please contact Customer Relations on 0808 100 0105. We are open 8.00am to 6.00pm Monday to Friday and 9.00am to 1.00pm on Saturdays. Calls are free within the UK. For your security and to improve the quality of our service, we may record and monitor telephone calls.