7 May 2009
– New ISA limit should apply to investors of all ages from October –
Brewin Dolphin, the UK’s largest independent private client investment manager, is pushing for the Government to raise the ISA limit from £7200 to £10,200 for all investors from 6th October 2009 and not just restrict it to the over 50s for the first six months.
Implementing a two tier approach – where investors aged 50 or over will benefit from a gain in tax-favoured allowance from October, but younger investors will have to wait until April 2010 – will incur massive implementation costs for ISA managers. Systems will need to be enhanced to cope with additional age based check on subscriptions, systems upgrades that will only be in use for six months.
Balanced against the hundreds of thousands it will cost the industry, the six-month tax benefit to investors in the over age 50 bracket will be minimal. If the extra £3000 is invested in gilts that produce a five percent yield, this would equate to £75 over a six month period. Once the ISA management fee is deducted, basic rate tax payers stand to make a saving of less than a £5.
Charlotte Black, Director of Corporate Affairs at Brewin Dolphin comments: “Brewin Dolphin welcomes the extension of ISA thresholds to £10,200, which have at last caught up with inflation. But limiting the saving to the over 50s for the first six month period will cost the industry dearly. We call on the Government to open the threshold to all investors from October – a move which will prevent the industry from incurring heavy costs and benefit investors of all ages.”
-ENDS-
For further enquiries please contact:
Lucy Clark / Lucy Willatt
HSQ- Telephone: 020 7796 4133
or Charlotte Black, Brewin Dolphin – 0845 213 3331