ISA FAQ

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  • isasmurfisasmurf Forumite
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    My TOISA's about to mature. What can I do?
    It can be transferred to any Cash ISA.

    In a HMRC Bulletin to ISA managers it says
    Transferring a TESSA Only ISA

    We have been asked to clarify the rules on transferring TESSA Only ISAs. In particular, can a TESSA Only ISA (TOISA) only be transferred to another account designated as a TOISA?

    A TESSA Only ISA (TOISA) is a special type of cash component ISA – one that was set up to receive the capital invested in a matured TESSA. The normal rules for transferring ISAs therefore apply: subscriptions to a TOISA may be transferred to another account designated as a TOISA, a cash mini-ISA, or the cash component of a maxi-ISA.

    The main industry body for ISAs also has a useful page:
    http://www.tisa.uk.com/savings.html?scheme=3
    The ISA Regulations made provision for the capital from a matured TESSA, which had matured after 5 January 1999, to be subscribed to a cash Mini ISA, the cash component of a Maxi ISA, or to a TESSA only ISA
    and (emphasis theirs)
    It should be noted that, where TESSA capital was subscribed to a TESSA-only ISA, this classification only remained until the end of that tax year after which the ISA was simply a cash ISA and, as such could be combined with or transferred to any other cash ISA held by the investor.

    There has been no such thing as a TESSA-only ISA since 6 April 2005.
    (However a number of cash ISA products aimed at ex-TESSA savers are marketed with product names such as TESSA ISA etc.)
  • isasmurfisasmurf Forumite
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    New rules will come into force for ISAs from 6th April 2008 (subject to approval by Parliament).

    How do they affect you?

    The draft legislation
    • Remove the designations of 'Mini', 'Maxi' and 'TESSA only' from the regulations

    • There will be two types of account, a cash account and a stocks and shares account. Each account will hold only a cash component or stocks and shares component (as appropriate).

    • The overall subscription limit will increase to £7,200, of which no more than £3,600 can be put into the Cash account. It is up to investors to determine how to utilise their overall limit, as long as no more than £3,600 goes into the Cash account.

    • existing TOISA and Mini Cash ISAs will be redesignated Cash accounts

    • existing Mini Stocks & Shares will be redesignated Stocks & Shares accounts

    • existing Maxi ISAs holding only Stocks & Shares will be redesignated into Stocks & Shares account.

    • existing Maxi ISAs holding both a Stocks & Shares component and a Cash component will be split into their appropriate components so the S&S becomes a S&S account, and the Cash becomes a Cash account.

    • Cash (current and previous years) can be transferred to a Stocks & Shares account

    • existing PEPs will be redesignated Stocks & Shares accounts and will fall under ISA rules
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