ISA Limits
Individual Savings Account (ISA) limits of £7,000 maximum and £3,000
for cash will be retained until 5 April 2010.
(They had been due to fall from 6 April 2006.)
ISAs and Child Trust Funds
The Government will extend the rules for qualifying investments in Individual
Savings Accounts (ISAs) and Child Trust Funds (CTFs), allowing the holders
of such accounts and funds to invest in all retail collective investment
schemes authorised by the Financial Services Authority (FSA).
The extension will take effect from 6 April 2006. It will cover authorised schemes which qualify as ‘UCITS’ schemes under the European Directive on Undertakings for Collective Investment in Transferable Securities (‘the UCITS Directive’), and ‘non-UCITS’ retail schemes, which have slightly more relaxed rules, allowing access to a wider range of investment products including real property.
However, the schemes must not restrict savers’ ability to access their savings and schemes which apply the FSA’s ‘limited redemption’ rule will not be eligible.
Pensions Tax Simplification
Legislation introducing an extensive and universal new regime for personal
and occupational pensions was introduced in Finance Act 2004 and
is due to come into force on 6 April 2006. A number of further measures
will now be added, most of them covered in an Inland Revenue Technical
Note published on 16 February 2005, to provide additional flexibility
for pension schemes and contributors, to clarify aspects of the new
rules, to smooth the transition from current to new regime and to
introduce further anti-avoidance and compliance rules. Pre-existing
schemes will now have at least until 6 April 2011 to modify their
scheme rules.