ISA changes for 2008 February 24th, 2008
From April 2008, ISA rules are being simplified. Maxi ISAs and Mini ISAs are a thing of the past and will be replaced by one ISA account. The limit for the 2008/09 tax year will increase to £7,200, from £7,000 in the 2007/08 tax year.
The full £7,200 can be invested in equities (including unit trusts, oeics and investment trusts) or up to half can be invested in cash with any remaining balance invested in equities.
For those with Personal Equity Plans (PEPs), these will no longer exist and funds held in a PEP will now form part of your ISA holding, without affecting ISA limits.
The current tax rules are not affected by the simplification and any capital gains and dividend or interest earnings remain tax free. Dividends will continue to have 10% tax deducted at source, although there is no further to pay for higher rate taxpayers.
