Stand-out Q – ISA subscriptions…

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THU, 11 DEC 2014

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question

A client paid £5,940 in to a cash ISA on 6 April 2014. Can they make further subscriptions up to the £15,000 limit before 6 April 2015?

Answer

Since 1 July 2014, the ISA subscription limit has been £15,000. Prior to this, the limits were as follows:-

Cash ISA £5,940
Stocks and shares ISA £11,880 (of which up to half could be held in a cash ISA)

The £15,000 limit for the 2014/15 tax year includes both a cash and stocks and shares ISA and also includes any subscriptions made prior to 1 July 2014 ( which were subject to the old limits).
When making further subscriptions, it is important to remember that only one cash and one stocks and shares ISA can be opened during the tax year.
If the client’s existing provider will not accept subscriptions to the existing cash ISA to take account of the new limit, it should be possible to transfer the account to a new provider who will allow further subscriptions, but it will not be possible to open a second cash ISA in the 2014/15 tax year.

If the client has already opened a cash ISA, it will still be possible to open a stocks and shares ISA to make further subscriptions and vice versa.
The £15,000 limit only takes in to account subscriptions made in the current tax year.

We will be running a webinar discussing the new ISA regime in the new year, covering this issue and some of the opportunities available, in more detail.

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