Further changes to ISAs

News: April 2015

Further changes to ISAs

The current £15,000 ISA limit is to be increased to £15,240 from 6 April 2015. Remember that the 50% cash ISA restriction was abolished from 1 July 2014 so that any combination of cash and stocks and shares can be held within the ISA wrapper up to the overall £15,240 limit. The Junior ISA limit increases to £4,080 from 6 April 2015.

In the 2015/16 tax year individuals will be able to take money out of their ISA and put it back in within the same year, without losing their ISA tax benefits as long as the repayment is made in the same financial year as the withdrawal.

Zero tax rate on savings 2015/16

As announced last year there will be a zero rate on the first £5,000 of savings income from 2015/16 onwards. Note however that this will only provide full benefit to those with taxable income between the basic rate band £10,600 and £15,600.

£1,000 interest income tax free 2016/17

From April 2016, a tax-free allowance of £1,000 (or £500 for higher rate taxpayers) will be introduced for the interest that people earn on savings. If they are a basic rate taxpayer and have a total income up to £42,700 a year, they will be eligible for the £1,000 tax-free savings allowance.

If they are a higher rate taxpayer and earn between £42,701 and £150,000, they’ll be eligible for a £500 tax-free savings allowance, but those with income in excess of £150,000 a year will be taxed in full on their interest income.

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