DIY Investor Magazine
/
March 2014
15
Which equates to an additional £50,000 in tax free
returns compared with investing the current £11,880
allowance per year over the same period. The NISA limit
can be fully invested into stocks and shares, cash or any
combination of the two.
*This figure is based on an investment return of 5% per
annum after fees, compounded annually.
DO I HAVE TO WAIT UNTIL 1ST JULY IF
I WANT TO ADD £15,000 INTO MY ISA
THIS TAX YEAR?
You can invest up to £11,880 in a stock and shares ISA
now, and top it up to the full £15,000 from 1st July.
WHAT’S THE DIFFERENCE BETWEEN
CASH ISAS AND STOCKS AND SHARES
ISAS UNDER THE NEW ISA RULES?
Cash ISAs will still offer a rate of interest, often requiring
you to ‘lock in’ your investments for a set period in
order to receive the quoted rate. Stocks and shares ISAs
allow you to take control of where your money is being
invested in line with your own risk appetite and financial
objectives.
Although your capital may be at risk, if you’re saving
for the longer term stocks and shares ISAs do have the
potential to offer higher returns than saving through a
cash ISA.
ARE JUNIOR ISAS CHANGING?
From 1st July Junior ISAs (JISA) annual subscriptions rise
from £3,840 to £4,000 with the ability to invest in stocks
and shares, cash, or any combination of the two on
behalf of a child.
The fact that anybody can contribute into a JISA account
on behalf of a child makes it possible to collectively build
up a significant sum for their future.
Investing £4,000 into a JISA each year would result in a
portfolio valued at more than £100,000 on their 18th
birthday, assuming an annual growth rate of 5% - a
boon for those faced with tuition fees or trying to get
on the property ladder.
CAN I STILL TRANSFER ISAS FROM ONE
PROVIDER TO ANOTHER?
The new ISA rules are far more flexible and transfers
should be made within fifteen days; transferring
previous tax year ISAs to a new provider does not count
as a new ISA contribution, so if you have built up a
number of ISAs with several providers over the years,
bringing them together under one roof is an easy way
to gain control and ensure they keep working in line
with your objectives and risk appetite.
WHAT ADDITIONAL INVESTMENTS
ARE ALLOWED FROM 1st JULY?
Certain Core Capital Deferred Shares issued by a
building society. Certain securities, such as retail bonds,
which have less than 5 years to run to maturity at the
time they are first held in an account.
Certain investments that do not currently satisfy the
current ‘cash-like test’ for Stocks and Shares ISA - such
as some company shares, units or shares in a collective
scheme, and some types of insurance policy.
In addition, cash held in Stocks and Shares NISAs need
not be held for the purpose of investing in qualifying
investments. Any interest arising on this cash will not
be subject to a flat rate charge of 20 per cent.
The Government intends to enable peer-to-peer
loans to be held within NISA and will consult on how
to implement this later this year. The Government
will also explore extending NISA eligibility to debt
securities offered via crowd funding platforms.
YOU CAN INVEST UP TO £11,880 IN A
STOCK AND SHARES ISA NOW, AND TOP IT
UP TO THE FULL £15,000 FROM 1ST JULY.
