PIMA WELCOMES NEW INLAND REVENUE MOVES TO REDUCE ISA TRANSFER AND MINI/MAXI CONFUSION
Changes to the ISA regulations, effective this week, will help more people save without losing tax reliefs on transfers and mini/maxi misunderstandings, according to the PEP and ISA Managers’ Association.
PIMA, which has long lobbied for these moves, welcomed the changes which will now allow the Inland Revenue to ‘repair’ many invalid ISAs which previously would have needed to be made void (closed down).
There are three areas where invalid ISAs can now be repaired by the Revenue:
If a saver opens a certain type* of ISA, later closes it and then, all in the same tax year, opens another ISA of the same type with another manager**
If a saver has put funds from a matured TESSA into an invalid*** ISA
If a saver subscribes to an incompatible combination of mini and maxi ISAs in the same year – the second ISA can be repaired
*Restricted to mini cash, mini stocks & shares or TESSA-only ISAs
**Known as a ‘self-transfer’ (correct procedure is to instruct first manager to transfer the account)
***Only certain reasons for ISA invalidity apply
Tony Vine-Lott, director-general of PIMA, said:
‘PIMA is extremely pleased that the Government has decided to implement these changes. We have been campaigning for these move for some time. The current regulations on mini and maxi ISAs are very confusing for many investors and this constructive approach to resolving unintentional subscription errors will do much to alleviate the problems caused. This has been an issue for a lot of investors with maturing TESSAs. Hopefully it also indicates that the Government now appreciates the need to review the design of mini and maxi ISAs, something that PIMA would be delighted to help advise them on.’