Guide to the new ISA (NISA) rules
Here is our new guide to the government’s new ISA (NISA) investment vehicles rules
In order to take full advantage of any of the potential tax savings that are possible within the government’s guidelines investors should pay special attention to their ‘New ISA’ (NISA) rules. This is now available to all UK resident tax-payers. The original ISA (Individual Savings Account) was a tax wrapper; this has slowly evolved over time, to offer UK tax-payers, an investment vehicle that they can use to protect a portion of their wealth from government taxation in the future.
Important new ISA facts
First of all, the yearly investment limit has now been significantly increased by the UK government to a more generous £15000 per annum!
The second fact of major importance is that you can now hold a mixture of various different investments, such as Stocks and Shares or cash, in the NISA wrapper. Any UK tax-payer should therefore seriously investigate the great possibilities that these new ISA rules have opened up. The UK government has itself published a useful new ISA factsheet which, it is hoped, will help any saver to make the best investment decision.
It is important for all UK citizens to save money which is why the UK authorities are being generous in this instance. We hope that our guide will be of assistance to anyone that is considering the implications of the new rules on ISA investment upon their hard earned savings.
Is there a catch?
You may well ask, is there a catch, and rightly so. If you are transferring your savings from an existing ISA to the new NISA then there are several new ISA pitfalls that you should be aware of in advance of making your investment decision.
Here is our new guide to the potential pitfalls of ISA transfers actioned within the government’s new ISA rules
1) It is important to note that there will most likely be a fee involved if you close your old ISA. There may also be a fee involved when you open your new NISA as well. You must check this first with both your old and new providers before you make your decision.
2) Note that there may be certain ‘exit penalties’ that are involved in the sale of the investments that you hold within your old ISA. Check first with your existing ISA provider to see exactly what these penalties may amount to.
3) When transferring this years (current tax year) funds take care. The new rules state that this can only be transferred in whole; it is therefore not possible to transfer part of your allowance. Ensure that this is the case or your current ISA may be invalidated costing you dearly.
4) Leaving the transfer of your ISA funds to your new ISA provider could cost you money. The reason for this is that your old ISA provider will be able to sell your investments as soon as they receive the instruction to do so from your new ISA provider. At the end of the day, this means that you would have no control over the sale price of, for instance, any stocks and shares that are held within an existing ISA. It is possible that you can complete the sale of all your sheltered investments prior to the transfer of the ISA funds yourself, helping to avoid this potential pitfall!
5) We think that if you are aware of these important considerations then all should be well during the transfer of your ISA funds across from your old ISA provider to your new NISA provider. We would always recommend that you shop around to find the best ISA provider so that you can avoid making a poorly informed investment decision.
Do compare the various different offerings that are available to find the deal that best suits your own investment needs.
Finding New ISA Providers
Of course, there are many companies that can provide you with this service. Some ISA providers, such as Nutmeg, offer their own new ISA guide and can provide you with the basic financial information that you will need in order to come to the right conclusion before you finalise your decision.
In our opinion the new ISA does provide savers with a great way to mitigate certain tax liabilities. It allows UK Taxpayers to keep their investments together, up to a yearly limit, in one place. The whole process of managing your personal tax sheltered investments is thus made as simple as possible.