The changing rules for ISAs in 2011

There have been many changes to the ISA allowances in recent years.

No new changes have been proposed for this tax year. This allows a maximum contribution of £10,200 to be made (2010/2011). If you chose, you can split this contribution, with £5,100 being made into a Cash ISA and £5,100 going into an equity type ISA. You can use one provider for each in a year and can vary providers each year if you require. The terms Mini & Maxi ISA’s have now been abolished.

ISA contribution allowance increase 2011/2012

In the new tax year 2011/2012, the new ISA allowance is proposed to increase from the current level of £10,200 to a new level of £10,680 from April 2011. This is an increase in the allowance with RPI (the Retail Prices Index) and it is now proposed that this limit will increase each year

New Junior ISA, October 2011

For further information, a Junior ISA (for those up to the age of 18) will be available from October 2011. At the time of writing, the maximum contribution limit is yet to be decided. Many parents and grandparents may find this of interest for their family in the future.

Review

Through the changes that have occurred with ISA regulations in recent years, it is always worthwhile reviewing your existing investment strategy (including ISA’s) , your asset allocation and your need for income, capital growth or both. This will usually be based on your circumstances and your attitude to investment risk. A guide to investment risk can be found here: http://www.churchouse.com/risk.php. ISA investment may not be suitable for everyone.

As I hope you can see from the above, there is a lot to consider both in the months of February and March 2011 and the forthcoming tax year (2011/2012). With this in mind, it should be noted that we are all different and your ongoing financial planning strategy will be individual to your needs, such as the use of annual tax allowances. Therefore, this article should not be seen or used as individual advice.

Seek Independent Financial Advice (IFA) for your circumstances. Churchouse Financial Planning Limited can be contacted in Guildford, Surrey on (01483) 578800.

Keith Churchouse
Chartered Financial Planner & ISO22222 Certified Financial Planner

Director of Churchouse Financial Planning Limited
Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority