ISAs here to stay

Market_Oracle

What it means exactly what it says

That there will be Cash ISA's and Shares ISA's instead of mini / maxi Cash / Shares ISA's

So yuo put £3k into a cash isa and you can put £4k into a shares isa, or you can put £7k into a shares isa, without the mini / maxi confusion that tends to occur today.

I doubt very much if it means that Cash ISA's rise to £7k, as the cash isa costs the treasury a lot more than the shares isa.

ReportInvestor

That makes sense MO.

So it's Balls appearing to be fantastically generous and make us all feel incredibly relieved - as I was, whereas in fact - by 2010 - inflation will have significantly eroded the value of the annual £7K allowance since ISAs were introduced.

But in practical terms - for the investor who knows his/her onions - there's going to be no change at all .

jem16 wrote:

And what will happen if Labour don't get kept in?

Well the LibDems are proposing to reduced CGT allowance from £8.8K to £1K and abolish taper relief - so they'd better not be proposing to reduce the ISA allowance as well :eek:.

cheerfulcat

ReportInvestor wrote:

So it's Balls appearing to be fantastically generous and make us all feel incredibly relieved - as I was, whereas in fact - by 2010 - inflation will have significantly eroded the value of the annual £7K allowance since ISAs were introduced.

A trick which has been pulled off successfully once before, with the threatened reduction of the ISA allowances and the subsequent " rethinking ".

dunstonh

The MINI/MAXI terms were a late addition to the ISA rules originally. Removal of them makes total sense and wouldnt require you to have cash and equity at the same place.

If you want 7k in equities, you go with it as you do now. If you want 3k in cash and 4k in equities, you go with it as you do now.

...and no, there are no decent MAXI ISAs that offer cash and equities in the same product.

dunstonh

....of course, GB could decide in his last budget to increase the ISA allowance and pave his way to the Labour leadership and re-election.

EdInvestor

dunstonh wrote:

....of course, GB could decide in his last budget to increase the ISA allowance and pave his way to the Labour leadership and re-election.

I wouldn't be surprised to see an increase in the equity ISA allowance to 10k - or the ability to use both a 3k cash ISA and a 7k equity ISA at the same time.

This would provide an incentive to people to switch equity type investments out of pensions and into ISAs, thus saving the Government a lot of upfront tax relief on pension contributions

We are pretty sure that the Govt is worried that the new pension rules could prove very attractive to higher rate taxpayers, who are now able to put very big lump sums into pensions which could cost GB a bundle in rebates.That's why Ed Balls keeps emitting threats about compulsory annuities being reimposed, it is thought.

Rather than do that, why not make ISAs more attractive, so people can still invest for the long term future - but at no upfront cost to the Treasury?

You know it makes sense, Mr Balls.;)

Mr_Mumble

dunstonh wrote:

If you want 7k in equities, you go with it as you do now. If you want 3k in cash and 4k in equities, you go with it as you do now.

Surely this would mean it is far easier for people to accidentally put 3K in cash and more than 4K in equities in the same tax year?

Paul_Herring

Mr_Mumble wrote:

Surely this would mean it is far easier for people to accidentally put 3K in cash and more than 4K in equities in the same tax year?

People can accidentally do this now under the 'old' system.

Mr_Mumble

People can accidentally open a mini-cash and maxi ISA but the rules are clear on this. It seems far easier to break, either by accident or ignorance, a deposit limit on a shares ISA when there is no clearly defined limit, as the 4K is for the mini-shares ISA.

Without the mini/maxi separation there will be a need to monitor the actual amount deposited in a shares component and compare this with any amount in a cash component. This seems far more complex and administratively expensive way of doing things than HMRC just checking that a person (National Insurance number) isn't breaking the one maxi or two different mini-ISAs rule.

ashm1

http://news.bbc.co.uk/1/hi/business/6178298.stm

Possibly convert your cash ISA to stocks and shares ISA.