Tax-efficient reforms delayed for Isa-holders
New rules allowing Isa-holders greater freedoms will only kick in next year
Investors expecting greater freedoms over how they manage their money must
wait for the new regime to kick in April next year.
The
Treasury
announced the delay yesterday to reforms that were first initiated by Ed Balls,
economic secretary to the treasury, in November 2006. Isas are tax-efficient,
savings products utilised by individual savings accounts – of which there are
about 17 million in the UK.
Since 1999 more than ?220bn has been invested in
Isas, which have replaced personal equity
plans as the main tax-efficient way to invest in the stock market.
One of the main changes involved in the reforms is the removal of the
differentiation between mini and maxi Isas.
Customers should theoretically be able to transfer cash Isas, which are
currently the more popular product, into stocks and shares without losing tax
benefits.
The investment industry has responded to the delay in the implementation by
saying it expected the new rules to come into force by April this year.
However, fund management groups welcomed the delay, saying it would give them
more time to update their systems, the FT reported.
Further reading:
Investors attack ‘rules-based’ ISAs
ISA savers can move cash but keep tax
benefits
