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ISAs become NISAs and become even more flexible

ISAs become NISAs and become even more flexible

What is changing as a result of Individual Savings Accounts (ISAs) becoming New Individual Savings Accounts (NISAs)? Read on to learn about five changes that take effect from today, 1st July 2014 – plenty of good news for investors!

The day has come when our ISAs become NISAs; an even more generous and flexible investment than they were already.

So what’s changed?

  • British CurrencyThe big news is the jump to a £15,000 annual investment allowance which can be invested all in cash (if we want) rather than the previous 50%.  Anything we’ve subscribed already since April will of course count towards this allowance.
  • We still can only open one account a year so either top up your existing one or move it to a different provider and top it up once the transfer is done.  Transfers from a cash NISA to another Cash NISA must usually be done within 15 working days of you making the request (any other type is usually 30 days).  In my experience this is usually done much quicker though.
  • Cash held in a stocks and shares NISA doesn’t now have to be held for the purposes of investment and any interest won’t now be subject to tax at 20% like it was before.
  • We can now transfer our stocks and shares NISAs to cash NISAs which we couldn’t do before under the ISA legislation.
  • The 5% cash like test has gone – this was originally put in place to stop an investment that had the potential loss of less than 5% to be held in a stocks and shares ISA (they had to go in cash ones) – now it’s gone it means stocks and shares NISAs can hold lower risk investments.

And let’s not forget Junior ISAs (they don’t appear to have changed their name!) – they  have a higher tax free allowance of £4,000 from 1st July – and for any super rich 16 and 17 year olds they can also have a cash NISA as well…

For further help with your investment exams go to: for CF2  for R02 for J10 for J12 for AF4