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Dotting the 'I's' in ISA

At the time of writing, it is eight months until the proposed new ISA regime comes into force. The basis of the new regime, that those aged under 65 will have a maximum cash ISA investment limit of £12,000 and will not be able to transfer from a stocks & shares ISA to a cash ISA, and that interest paid on any cash held in a stocks and shares ISA will be subject to a 22% tax charge, are fairly well understood.

However, as highlighted in a recent consultation response from UK Finance, there is still a lot of work to do in dotting the i’s and crossing the t’s before ISA providers can make the changes required in order for their systems to meet HMRC requirements. For example, what happens if an individual makes an ISA transfer request before the end of this financial year but the transfer is held up by the provider for some reason. Or how is an ISA treated if someone aged under 65 dies but the estate is not wound up until after they would have turned 65? UK Finance have also highlighted the increased administrative costs and ‘unintended consequences’ if all cash held within a stocks and shares ISA is taxed, even if it is only being held to cover monthly charges.

If you are looking for advice on investments or if your situation has changed and you may therefore need to review your existing investments or pensions, contact Beckworth by using one of the links on our website.