2015/16 Year End Strategies – Will you make the most of the latest ISA changes?
Individuals can invest in any combination of cash or stocks and shares up to the overall annual subscription limit of £15,240 in 2015/16. However, a saver may only pay into a maximum of one Cash ISA and one Stocks and Shares ISA each year. You have until 5 April 2016 to make your 2015/16 ISA investment.
Meanwhile, a tax-free Junior ISA (JISA) is available to all UK resident children under the age of 18 as a Cash or Stocks and Shares product or both. Total annual contributions are capped at £4,080. Funds placed in a JISA will be owned by the child but investments will be locked in until the child reaches adulthood. If a child has a Child Trust Fund account this can now be transferred into a JISA.
The new Help to Buy ISA
Alternatively, those wishing to save for their first home may benefit from the new Help to Buy ISA, which is available from 1 December 2015. The account enables first time buyers to save monthly deposits of up to £200, with an opportunity to deposit an additional £1,000 when the account is first opened.
The Government will then provide a 25% bonus on the total amount saved, including interest, capped at a maximum of £3,000 on savings of £12,000, which is tax-free. The bonus can only be put towards a first home located in the UK with a purchase value of £250,000 or less or up to £450,000 in London. An individual may only subscribe to one Cash ISA per year, so an account holder cannot subscribe to a Help to Buy ISA and a Cash ISA.