DIY Investor Magazine
/
March 2016
18
GREATER FLEXIBILITY
FOR ISAS IN 2016
Following on from the greater flexibility that came with
the introduction of the New ISA or ‘NISA’ in July 2014
several more rule changes come into force this year,
helping you get even more out of your savings and
investments.
HELP TO BUY ISA
Launched on 1st December 2015 the Help to Buy ISA
offers prospective first time buyers the opportunity
to save into a Cash ISA where the government will add
25% of the amount saved at the point a property is
purchased up to a maximum of £3,000 on £12,000
saved.
Up to £1,200 can be saved in the first month with £200
per month thereafter; because this is a Cash ISA
product you cannot subscribe to another Cash ISA in
the same tax year.
Help to Buy ISAs offer attractive rates of up to 4% p.a.
which is significantly higher than the majority of Cash
ISAs on the market and there is sure to be demand.
INNOVATIVE FINANCE ISA
A new wrapper is being launched on April 6th 2016
called the Innovative Finance ISA which is designed to
accommodate peer-to -peer (P2P) loans and crowd
funding debt securities or bonds.
Although P2P investments are effectively loans, there is
some risk of default, and so the Innovative Finance ISA
could be seen as something of a hybrid.
ESTATE MANAGEMENT
Married savers passing away each year were seen
to be unfairly penalised by what was dubbed the ‘Death
Tax’ on their ISA pot.
However, ISA benefits can now be passed on to
spouses after George Osborne announce in his 2015
Autumn Statement that the tax status will be maintained
for ISA investments
during the estate
administration period.
The change is expected
from April 2016 following
consultation with ISA providers who will be required
to transfer what is an individual concession to a
representative.
FLEXIBLE ISA
From April 2016 ‘radically flexible ISAs’ will allow savers
to withdraw and replace their savings within the same
tax year without losing the ISA tax benefits.
This means that savers can use their ISA savings to
cover short term needs, but replace them in time to
retain the tax benefits. Investment ISAs can also
support this facility if the flexible options are made via a
cash trading account.
UNRESTRICTED TRANSFERS BETWEEN ISAS
Increased transfer flexibility allows ISA investors to
ensure they have the right mix of savings and
investments.
Stocks and Shares ISA can be transferred to Cash ISA
allowing full flexibility to move ISA savings into the most
beneficial account.
Cash is important to meet short term savings and
provide an emergency fund and around 80% of
accounts subscribed to in the 2014-15 tax year were
Cash ISAs; however the stock market is likely to give
you a better return over the longer term and this
flexibility allows movement into Investment ISAs for
those seeking higher returns. Child Trust Funds can
be transferred to Junior ISA but not the other way
around.
More information about ISA options and allowances can
be found at
