new isa and questions we've been asked

The new ISA and the questions we’ve been asked

9th December 2014

Since the launch of the New ISA at the beginning of July, we’ve received quite a few questions from our members, who wanted to find out how these recent changes might affect their existing ISAs. So, to help them and others who are keen to get the most from their New ISAs, we have put together a list of frequently asked questions and answers to these.

We hope these questions and answers provide you with a clearer view on the New ISA changes; however, if you’re still unsure please get in touch with us on 0330 134 5898.

New ISA questions:

1.   I took an ISA out in the 2013 to 2014 tax year. Will I be able to top up this ISA to the new annual allowance of £15,000?

Sadly you can’t top up an Isa taken out in an earlier tax year, only add to an ISA opened in the current tax year. So once the tax year ends on April 5, no further money can be added to ISAs that you started in 2013-14. This can be a very confusing point for members, especially if you pay a monthly amount by direct debit into your ISA on a regular basis. To help keep things simple, your ISA provider will refer to your savings plan as ‘Your ISA’; however from the tax-man’s perspective you would have a series of ISAs, one for each tax-year.

2.   If I currently have a Stocks and Shares ISA can I switch it to a Cash ISA?

Yes you can. This is one of the new changes that have been introduced. Previously you could only switch from a Cash ISA to a Stocks and Shares ISA and not vice-versa. However, you will just need to check with the provider that they allow transfers in.

3.  How often can I transfer between a cash ISA and a stocks and shares ISA?

You can transfer between cash and stocks and shares as many times as you like.

4.  How many ISAs can I open?

You are still limited to two, which is one of each, so one cash ISA and one stocks and shares ISA. The maximum you can invest in the two combined is now £15,000 in the 2014-2015 tax year. These are the rules of HMRC.

5.  What about Junior ISAs? Have there been any changes here?

Yes the annual allowance for a Junior ISA is now £4,000. Also, if you’re aged between 16 and 18 years old, you can open a cash ISA as well! This means you gain a tax-exempt allowance of £19,000 in total.

6.  How can I transfer my savings into a Shepherds Friendly Stocks and Shares ISA?

We look to make this process as simple as possible. All you have to do is call us, let us know who is your current Stocks and Shares ISA provider and what is your current ISA account number. Our customer service team will get in touch with your current provider and will take care of the rest of the transfer process.

 

Date published: 28/07/2015