9th February 2016
New ISA rules
During the March 2015 Budget, Chancellor of the Exchequer George Osborne announced some changes to the ISA structure, put in place for the start of the 2016/17 tax year (5th April 2016) to encourage saving. We have highlighted the important changes:
1) Flexible Withdrawal
From 6th April 2016, ISA investors can withdraw and replace money as often as they like without it counting towards their ISA limit for that year, as long as the repayment is made in the same tax year as the withdrawal. For example, you could invest the full £15,240 in May, withdraw £5,000 in June, a further £300 in July, and then replace the £5,300 in September.
2) Help to Buy ISA
If you are saving up for a deposit on your first home, the Help to Buy ISA may be of interest. It was launched in December 2015, is exclusive to first-time buyers and benefits from a bonus from the government. For every £200 you save, the government will add 25%, up to a maximum bonus of £3,000. It's available for buyer, not household, so if you are saving with a partner, the bonus potential is up to £6,000 towards your house deposit. You have to choose between either a Cash ISA or a Help to Buy ISA, but you can have a Help to Buy and a Stocks & Shares ISAs in the same tax year.
3) Innovative Finance ISA
Innovative Finance ISAs will also be available from 6 April 2016. These ISAs allow you to invest in peer-to-peer lending platforms such as Zopa, Ratesetter and Funding Circle and pay no tax on any interest received. They will have the same annual allowance as the regular Stocks & Shares ISA of £15,240.
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