ISA developments could help with IHT planning

The individual savings account (ISA) limit rose to £11,520 for 2013/14 (£5,760 for cash element). However, there was a more interesting development announced shortly before the Budget.

The Government published the results of its informal consultations on including ‘within ISAs’ shares listed on the alternative investment market (AIM) and similar specialist markets and said that move would be going ahead, although no final date was specified. There was also an important supplementary confirmation: AIM shares and the like will qualify for inheritance tax (IHT) business property relief under the normal rules, which can mean they are effectively removed from IHT after a two-year period of ownership. As there were moves in the Budget to clamp down on IHT planning, the ISA reform is all the more welcome.

The Chancellor also announced another long-awaited piece of ISA news. There is to be consultation on the options for transferring savings held in Child Trust Funds (CTFs) into Junior ISAs (JISAs). CTFs currently enjoy the same annual investment limit as JISAs (£3,720 in 2013/14), but since 2011 have not received any government payments.

The value of tax reliefs depends on your individual circumstances.  Tax laws can change.  The Financial Conduct Authority does not regulate tax advice.  The value of your investment can go down as well as up and you may not get back the full amount you invested.  Past performance is not a reliable indicator of future performance.  Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

Friday 26th April 2013

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