Individual Savings Accounts (ISA) and New ISA (NISA)
Historically investors have been able to invest in two separate ISAs in each tax year; a cash ISA and a stocks and shares ISA.
The income from ISA investments is exempt from income tax. Any capital gains made on investments held in an ISA are exempt from capital gains tax.
ISAs are allowed to invest in cash (including bank and building society accounts and designated National Savings), stocks and shares (including unit and investment trusts). From 1 July 2014 it will be possible to invest in a wider range of securities including certain retail bonds with less than five years before maturity and Core Capital Deferred Shares issued by building societies will become eligible to be held in a NISA.
From the 1 July 2014 ISAs will be reformed into a simple product, the ‘New ISA’ (NISA) and all existing ISAs will become NISAs.
From 1 July 2015 the overall annual subscription limit for these accounts will be increased to £15,240 for 2016/2017. Special rules apply if investments are made before 1 July 2014. Investments for 2014/15 cannot exceed £15,000 in total.
Savers will also be able to subscribe this full amount to a cash account (currently only 50% of the overall ISA limit can be saved in cash). Under NISA, investors will also have new rights to transfer their investments from stocks to a cash account.
There are also changes to the rules on the investments that can be held in a NISA, so that a, Junior ISA or Childs Trust Fund (CIF).
ISA Limits 2016/2017
From 06/04/2016 to 06/04/2017 – Investment Limit £15,240, comprising in both cash and/or balance in stocks and shares.