(ISA) Limits Are Changing
In the current tax year 2007/8 you can save up to £7,000 in an Individual Savings Accounts, more commonly referred to as ISAs. But this figure is on the increase for the 2008-9 tax year. Here, money4dentists Richard Lishman explains:
"Introduced on 6th April 1999, ISAs replaced the defunct Personal Equity Plans, the Government introduced them as a tax efficient incentive to encourage savings. There are two types of ISA, mini and maxi.
"An ISA comprises an investment in cash of up to £3,000, and other investments (such as stocks and shares) up to a value of £4,000. Mini ISA holders can take two each tax year, but one must consist of a cash investment and the other stocks and shares. Maxi ISA holders are limited to one a year, and it must solely be made up of stocks and shares.
"In the March 2007 Budget, the then Chancellor, Gordon Brown, announced an increase in the allowances for the 2008-9 tax year. From 6th April 2008, the cash limit of an ISA will increase to £3,600 and the stocks and shares proportion is set to rise to £7,200. The distinction between a mini and maxi ISA will be abolished to simplify the process."
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