History Individual Savings Account

1 history

1.1 past subscription limits
1.2 restrictions removed july 2014
1.3 transition , older types of isa
1.4 cat standards

history
past subscription limits

in march 2010 budget chancellor of exchequer alistair darling announced in future years limits rise annually inflation, rounded nearest £120, ease arithmetic using monthly payment schemes. 2013–14 inflation index used changed rpi cpi.

the chancellor of exchequer george osborne announced in march 2014 budget adult isa limit increased £15,000 1 july 2014, , junior isa limit £4,000. date savers allowed invest full amount cash or stocks , shares, or mix of both. savers able switch stocks , shares isas cash isas.

restrictions removed july 2014

many restrictions relaxed 1 july 2014 , branding new isa introduced batch of changes:

there ban on transferring s&s isa cash isa. cash s&s allowed 2008/2009. jisa go in both directions.
interest on cash in s&s isa no longer subject 20% charge. cash in s&s isa subject fca client money rules , cash isa providers can opt in if wish.
cash can held in s&s isa when not intended investment. there no specific time limit on how long cash held under old rules, whether isa manager believed money being held future investment.
the s&s isa had 5 years remaining @ time of purchase restriction on public debt securities such government, corporate bonds, debentures , eurobonds. conditional redemption, such based on possible future market performance, acceptable, borrowing company or government redeeming security or exercising of options if there defaults, insolvency risks or covenant breaches.
the s&s isa had requirement credible possibility of losing @ least 5% of investment, called 5% test. investments failed test had held in cash isa instead:

a cash isa can still hold qualifying investments failed 5% test holding within stocks , shares isa before 1 july 2014 when test removed facility rarely, if ever, made available cash isa provider. such investments not deposits , not have deposit fscs protection, may have £50,000 investment protection instead, provider must make situation clear.



transition , older types of isa

peps became stocks , shares isas, exemption allowed them continue hold investments not held in stocks , shares isa, provided investment did meet pre-2001 pep rules.

for time there mini isas, maxi isas , tessa-only isas. mini isa hold cash or stocks, potentially many if operated fund house or platform, while maxi isa hold cash , stocks. uk resident individual aged 18 or on invest in 1 maxi isa per year, both components provided single financial institution. alternatively, person invest in 2 mini isas, 1 each component. 2 mini isas 2 different providers if investor wished. toisas , full transfer of isas created in previous years provider had no bearing on these restrictions. in march 2007 budget limits 2008/9 tax year increased. tax year 2008/2009 distinction between mini , maxi isa abolished.

an insurance component available in both maxi , mini isas. since 2005/06 tax year component has not been available. collective investment funds once qualified component have been reclassified qualifying either cash or stocks & shares component.

new tessas not created after 5 april 1999, required five-year term of tessas ended 5 april 2004. toisas created allow original capital (excluding interest) invested in tessa (up £9,000) reinvested in tax free form. 1 invest in toisa capital matured tessa, , new toisas created complete transfer of funds toisa.

cat standards

in april 1999, government introduced voluntary cat standard isas (standing charges, access, , terms ) make them easier inexperienced customers understand , proposed intention lower costs attract more investors. not guarantee investment performance or investors buy or sold right type of investment.

many equity funds meet cat standards, restriction on costs means these funds index funds, require little management , follow given index, such ftse 100 index.

cat standards discontinued treasury on 6 april 2005 following introduction of stakeholder product suite, although existing cat standard isas continued on same terms , conditions.