Finance Bill Tracking Service 2007 | Budget 2007 | Budget Notes

BN39 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

2   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

3   The increased limits will have effect from 6 April 2008

Current law and proposed revisions

4   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.

5   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.

6   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

7   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 at www.hmtreasury.gov.uk)

8   If you have any questions about this change, please contact Anna Caffyn on 020 7147 2855, email Anna.Caffyn@hmrc.gsi.gov.uk. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk