NEW ISA ALLOWANCES EXPLAINED FOR 2014-2015 (NISA)
Do you find ISAs confusing? They just got easier to understand, and a lot more generous after the Budget. This article explains all you need to know about the New ISA (NISA) allowances for 2014 to 2015.
- Current ISA allowances for 2013-14
- New ISA allowances for 2014-15
- How the new limits compare to the old limits
- Changes to how you can transfer ISAs
The current ISA allowances for 2013-2014
The ISA allowances will rise to £15,000 from July 2015. At the moment, the ISA limit is £11,520. This can be split as follows:
- Cash to a maximum of £5,760
- Stocks & shares to a maximum of £11,520
- If you use any cash allowance this will reduce the stocks & shares allowance. Thus, £1,000 in a cash ISA would reduce the amount allowed in a stocks and shares ISA to £10,520
New ISA allowances for 2014-2015
The good news is that the Government has not only increased the new ISA allowances significantly to £15,000 per person per tax year. They have also simplified the relationship between cash ISAs and stocks & shares ISAs. Now the split will be as follows:
- Any combination of cash or stocks & shares to a maximum of £15,000
How the new ISA allowances compare to the previous limits
Transfer of ISAs
Previously, you could transfer cash ISAs to cash ISAs to get a better interest rate. You could also transfer cash ISAs to stocks & shares ISAs. You could not transfer from stocks & shares ISAs back to cash ISAs. This was clearly unfair since many people wanted to take less risk as they got older. Therefore, the new rules from July 2014 will allow you to transfer your existing ISAs in any direction – from cash to shares or vice versa.
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