The rule changes, announced by the Chancellor in his autumn statement, are designed to simplify the ISA scheme and encourage more people to invest tax-free.
These changes allow investors to open multiple ISAs of the same type every tax year.
Some of the changes the Chancellor made are as follows:
From 6th April 2024, it will be possible to make multiple subscriptions to the same type of ISA in one tax year. The current rule is one ISA of each type, each tax year.
Partial transfers of current tax year ISAs can be made. Currently, the entire subscription must be transferred.
If you hold an existing ISA that received no contribution in the previous tax year, a fresh ISA application is no longer required.
However, in a survey of 2,000 UK adults by Wesleyan, 78% said they did not know about this rule change.
70% of those surveyed said they don’t know how different types of ISA work.
Of those who don’t hold ISAs, 45% believe that you need a large sum of money to open an ISA, while 22% said they did not want to lock their money away where they cannot access it. Both are untrue.
ISAs have always been sought for those who can regularly invest the full annual allowance and so build up substantial tax-free savings. With the Capital Gains Tax annual exempt amount and the Dividend Allowance being reduced next tax year, they are becoming more attractive to those wishing to set aside smaller regular or one-off lump sums.
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