ISA limits increase
The Chancellor announced in the June Budget that from 6 April 2011 the ISA limits will increase annually in line with inflation.
The new limit is calculated by reference to the RPI figure for the September before the start of the new tax year. The RPI for September 2010 was 4.6% so the rounded 2011-12 limits will be an overall ISA subscription limit of £10,680 of which up to £5,340 can be subscribed to a cash ISA.
The new limits have been rounded to the nearest multiple of £120. This makes it easier for savers who make monthly savings to calculate their monthly payments more easily.
The current subscription limit is £10,200 of which up to £5,100 can be invested in cash.
The returns from an ISA account are free of all income tax and capital gains tax. Eligible holdings are cash (up to half the maximum), national savings products, life insurance products, stocks and shares. Account holders may make withdrawals at any time without the loss of tax relief.