BN 39: Individual savings accounts: increased subscription limits

Who is likely to be affected?

  1. All subscribers and providers of Individual Savings Accounts (ISAs)

General description of the measure

  1. The changes increase the amount that you can subscribe to an ISA. You will be able to subscribe up to £3600 per tax year to a cash ISA, and up to £7200 per tax year into a stocks and shares ISA, subject to an overall annual subscription limit of £7200 to both ISAs.

Operative date

  1. The increased limits will have effect from 6 April 2008

Current law and proposed revisions

  1. At the moment an individual can subscribe:
  • £3000 per tax year to a cash mini ISA
  • £4000 per tax year to a stocks and shares mini ISA

With the same or different providers. Or:

  • £7000 to a maxi ISA with a single provider, of which up to £3000 may be in cash.
  1. In April 2008 the ISA will be restructured to remove the distinction between mini and maxi ISAs, as set out in the Pre-Budget Report document: “Individual Savings Accounts: Proposed reforms”. After this date an individual will be able to subscribe to either a cash ISA, a stocks and shares ISA or both. Draft regulations are published today.
  2. From 6 April 2008 the subscription limits to the ISA will also be increased, which will mean that an individual can subscribe:
  • up to £3600 per tax year to a cash ISA
  • and up to £7200 per tax year into a stocks and shares ISA

subject to an overall limit of £7200 subscribed to both ISAs in a tax year.

Further advice

  1. Draft regulations are published today on other aspects of the ISA that will change from April 2008, following the document that was published at the Pre-Budget Report 2006: “Individual Savings Accounts: Proposed Reforms” (available from the Treasury website )
  2. If you have any questions about this change, please contact Anna Caffyn on 020 7147 2855, email Anna.Caffyn@hmrc.gsi.gov.uk.