TESSA-Only ISA

Under changes introduced in the 2008 budget, TESSA-Only ISAs will automatically become Cash ISAs.

TESSA stands for Tax Exempt Special Savings Accounts. They were available for five years and investors were allowed to place up to a total of £9,000 in them over that period. The last day you could open a TESSA was April 5th 1999 so all remaining TESSAs will now have matured. You can re-invest the original capital held in your TESSA for up to six months after your TESSA matures. Many providers offer a TOISA - a TESSA-only ISA - which is a special wrapper designed to hold your former TESSA investment. See our Providers' Page.

You can invest up to your full TESSA limit of £9,000 without affecting the usual ISA limits and, if you want to, you can open a mini or a maxi ISA in the same tax year.

See our Tax Guide

You can reinvest the capital in a cash mini ISA or the cash component of a maxi ISA, though many providers don't offer this service and insist on a TESSA-only ISA instead. They are likely to offer different interest rates on these so it is advisable to keep a close eye on rates.

You don't have to open the TOISA with the same provider who held your TESSA - you can transfer the money to any provider who offers the account.

ISAs can provide a flexible, tax efficient way to help build a pension fund. Visit us at www.pensions.co.uk for more information and a comprehensive guide to a financially secure retirement.

 

UK Investments - Financial, Property & Other Investments - 1998-2008

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