I’ve suddenly had a lot of people contact me to ask the above question regarding the tax free ISA (Individual Savings Account) products that are available to UK taxpayers.

This is probably due to changes that came in last month. If you don’t know what an ISA is then have a look at this earlier article.

Currently the overall ISA investment limit is £7,200 per tax year, which can be spread between stocks & shares and cash, and this limit is due to rise on April 10th 2010 to £10,200. However somewhat confusingly this new limit of £10,200 was introduced early (October 2009) for anyone aged over 50.

So currently depending on your age the limit is £7,200 or £10,200 but after April 10th it will be £10,200 for everyone.

However there are limits on the amounts that can be allocated to each component and they vary according to the kind of ISA you take out.


£7,200 (£10,200) in Stocks & Shares


Cash: £3,600 (£5,100)
Stocks & Shares: £3,600 (£5,100)

So, if you allocate £2,000 to Cash, you can put £5,200 into shares (or under the new limits, with £4,000 in Cash you could put £6,200 in shares). If you allocate nothing to Cash, you can put the full £7,200 (£10,200) in shares.


Remember – you can subscribe to up to 2 mini-ISAs annually, and use a different manager for each of the components. The limits are as follows:-

Cash: £3,600 (£5,100)

Stocks & Shares: £3,600 (£5,100)

The important point to note is that if you under-subscribe to any mini-ISA, the unused amount cannot be allocated to any other mini-ISA. So if you allocate £2,000 to Cash, the Stocks & Shares limit is still £3,600 and not £5,200 as would be the case with a maxi-ISA (or under the new limits, £4,000 in Cash would still leave your Stocks & Shares limit at £5,100). This is a fundamental area of difference between maxi and mini-ISAs.


The capital component only of the proceeds of a matured TESSA can be transferred into a special TESSA-only Cash ISA within 6 months of the TESSA’s maturity.

  • Income accumulated on the matured TESSA cannot be transferred.
  • The maximum amount you can transfer is £9,000.
  • The money you invest in a TOISA does not count towards your annual ISA allowance.
  • In any single tax year you can invest in a TOISA as well as a maxi ISA or mini ISAs, and it can be with a different plan manager.

Note that matured TESSA capital can also be invested in a Cash Mini ISA or the Cash component of a maxi ISA, and in both instances it counts as a zero value contribution – thus, if you want to invest more than £3,000 into stocks & shares, you could put the TESSA capital into the Cash component of a Maxi and still be able to invest up to £7,000 in equities in that Maxi.

Clear as mud isn’t it? For more information please contact James Green & Co

See Also:

Category: Taxation

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