PIMA WELCOMES NEW RULES ON ISA TRANSFERS AND WITHDRAWALS
PIMA today welcomed the Treasury’s move to strengthen the ISA regulations and clarify the position for investors who have bought a fixed term or guaranteed rate investment.
Some fixed term savings products lock-in investors for periods of up to five years. The Treasury move will allow investors to transfer their ISA or make withdrawals without penalty in the tax-free wrapper.
ISAs opened before October 1 2002, which currently prevent transfers and withdrawals can continue as long as ISA managers change terms and conditions.
Investors can still open a fixed term or guaranteed rate ISA which does not allow transfers or withdrawals until 24 August 2002 but no further contributions can be made after 5 April 2003.
Tony Vine-Lott, director-general of PIMA, said:
"We are pleased that the Inland Revenue has clarified the position on withdrawals and transfers from a fixed term investment within the ISA tax-free wrapper. We are also pleased that existing investors will not be penalised in any way by this move. Our proposals for a Retirement ISA fit well into this thinking as PIMA members are keen to offer investors flexibility around long term investments and encourage saving."