Budget 2009: Cash Isa Limit Increased

henben

Originally Posted by henben
What annoys me is that they are asking me to sign away my rights NOW to the proposed increase even if/when it does go through later.

Mikeyorks wrote: »

No more so than any of us who contributed to ISAs from the start of 09-10 and accepted the rates then ..... and still ..... in force.

True. However I purposely waited until after the budget because of the numerous rumours about increased limits. Whereas people who put money in a 2009-10 ISA before the budget must have been aware that there was a possible risk of any changes not being backdated.

Mikeyorks wrote: »

Your 'rights' will be re-aligned once the legislation + the practicalities of implementation are ironed out. Changing your application form hardly resolves the majority issues?.

Well changing the form in the way I suggested would resolve AN issue (not sure what you mean by 'majority' issue): as it stands you categorically state on 1st Direct's application form that you will not contribute more than £3600 this financial year. Are you saying that if/when the £5100 limit is implemented, and if/when 1st Direct decide to offer ISAs up to this increased £5100 limit, they will turn a blind eye to the fact that previous applicants will have legally stated they will not contribute more than £3600? My experience of investment compliance departments is that they haven't got a blind eye between the lot of them (unless it's blindness to common sense).

Mikeyorks wrote: »

...... nothing is concrete at this point. Consider Fixed Rate products where the T&Cs specifically state only one payment may be made. ISA Managers may not be prepared to re-open these to facilitate the extra payment.

Agreed - I went on to say: 'So you'll need to make sure that you choose a provider who is committed to accepting the full £5100 if it becomes law.' (Admittedly you might get away with it if the govt does decide to allow the extra £1500 to be with a second provider; but of course there is a risk that they might not do this. Again this issue seems to be an unecessary complication arising from implementing a change in the rules half way through the year - it tends to mess people up for the first part of the year.)

masonic

henben wrote: »

True. However I purposely waited until after the budget because of the numerous rumours about increased limits. Whereas people who put money in a 2009-10 ISA before the budget must have been aware that there was a possible risk of any changes not being backdated.

ISA application forms have always required you to agree to things that you should not be asked to agree with. For example, they often state that you should not contribute to any other cash ISA in the same tax year, even if you are only transferring previous years ISA contributions. I'm fairly sure nobody has ever been penalised for transferring a previous ISA and then opening a new ISA in the same tax year, regardless of what they have had to agree to on an ISA application form.

Similarly, I'm sure nobody will be prevented from benefiting from the increase in ISA limits due to the fact they have been told by a bank they cannot do so. Ultimately, it's HMRC that decides whether any rules have been broken, so if you are prevented from topping up your ISA to your new allowance, at worst you will be able to transfer your ISA to a provider who is less draconian and then top-up.

Mikeyorks

henben wrote: »

Whereas people who put money in a 2009-10 ISA before the budget must have been aware that there was a possible risk of any changes not being backdated.

Absolutely no chance of that happening. The result would have made the Poll Tax 'riots' look like kiddies playtime.

Are you saying that if/when the £5100 limit is implemented, and if/when 1st Direct decide to offer ISAs up to this increased £5100 limit, they will turn a blind eye to the fact that previous applicants will have legally stated they will not contribute more than £3600?

Draft legislation ("Individual Savings Account (Amendment) Regulations 2009") signed off by Treasury 22nd April and currently with ISA Managers for comment ..... by 20th May if I remember correctly. If then ratified by Parliament ...... that supersedes any declaration you made which was based on ISA legislation.

2Diane

Can anyone tell me how this works? Do we put £3,600 into the cash ISA now and then increase it in October?

masonic

2Diane wrote: »

Can anyone tell me how this works? Do we put £3,600 into the cash ISA now and then increase it in October?

Nobody knows exactly how it will work, but in theory you are supposed to be able to do as you suggest.

mark101

Just to be sure.... the limit increase is only available for the over 50's. So anyone under 50 will continue to be limited to the 3600 cash ISA until whenever they may change it?

noh

mark101 wrote: »

Just to be sure.... the limit increase is only available for the over 50's. So anyone under 50 will continue to be limited to the 3600 cash ISA until whenever they may change it?

The limit increase comes into effect, for those 50 or over, on 6th October 2009.

For all others the limit increase comes into effect on 6th April 2010.

mark101

noh wrote: »

The limit increase comes into effect, for those 50 or over, on 6th October 2009.

For all others the limit increase comes into effect on 6th April 2010.

Great thanks :j

TREVORCOLMAN

I have just called The Halifax. They DO NOT allow you to add to a fixed rate even to put in the extra £1500 the government announced!

TREVORCOLMAN

I am tempted to contact them again and ask if I can increase my payment to my Stocks & Shares ISA.

If they say yes I will say:

Yaboo sucks I dont want to!

:rotfl: