Changes to PEPS and ISAS

Due to the changes announced by the Government, PEPS will no longer exist and will be merged into ISAS from the 6th April 2008. PEPS are effectively reclassified as Stocks & Shares ISAS and subject to ISA rules.
Clients using our online valuation service will notice that their PEP has been transferred (or merged) into their existing ISA along with the cash and income.
Other changes have been made to the ISAS and these are summarised below;
* Higher Allowance - annual allowance has been raised from £7000 to £7200 per annum.
* Investment Flexibility - the distinction between Mini and Maxi ISA will be removed. There will be a Cash ISA (maximum limit of £3600) and a Stocks & Shares ISA. You will have greater flexibility in how you allocate your allowance between the two. You can invest the entire £7200 into a Stocks & Shares ISA or you can split it in any proportion between a Stocks & Shares ISA and a Cash ISA (as long as the Cash ISA does not exceed £3600).
* Transfer from Cash ISA to Stocks & Shares ISA - you can transfer some, or all, of your previous tax year ISA into a Stocks & Shares ISA. The transfer can be of any size and will not affect your ISA allowance for the tax year. The reverse, however, is not possible i.e. you cannot transfer the money back into a Cash ISA.
* Both ISAS will be available indefinitely with no set end date.
* An existing TESSA only ISA (TOISA) can also be transferred to a Stocks & Shares ISA.

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