For Immediate Release: Thursday 4 March 2004

ONE MONTH TO GO!

IMA OUTLINES IMMINENT CHANGES TO ISA INVESTING

The IMA today launches a guide entitled “Changes to ISA investing – April 2004”.

With only one month to go until the abolition of the dividend tax credit, the forthcoming changes to Individual Savings Accounts are still potentially confusing to investors. The IMA has produced a guide which outlines the changes and how they will impact ISA investors.

The guide also aims to dispel some of the myths surrounding ISAs, particularly with reference to the income tax position of 60:40 (distribution) funds, whilst also highlighting the remaining benefits of ISA investing. Such benefits include:

• Basic rate taxpayers will not have to pay any income tax on distributions received

• Equity ISAs will be beneficial to higher rate taxpayers as there will be no further tax to pay

• All gains from any investments sold within an ISA are free of Capital Gains Tax

• Interest on savings in the cash component will receive a 20% tax reclaim

• Corporate bonds and gilts are entitled to receive a tax reclaim of 20%

• There will be no need to declare your ISA on your tax return

• The ISA manager will claim back all of the income tax for you.

Richard Saunders, Chief Executive of the IMA commented:

”There continue to be benefits to investing in ISAs despite the removal of the dividend tax credit. By producing this guide the IMA hopes to help consumers make informed decisions about using their tax-free savings allowance. ”

A copy of “Changes to ISA investing – April 2004” is attached. Additional copies can be obtained from the IMA website at www.investmentuk.org or by calling the Unit Trust Information Service on 020 8207 1361.

-Ends-

For further information, please contact;

Helen Stephenson, Communications Officer, IMA, 020 7831 0898

Selina Staines, Communications Co-ordinator, IMA, 020 7831 0898

Out of hours contact:

Mona Patel, Head of Communications, IMA, 07834 089332

65 Kingsway London WC2B 6TD 

Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975 

www.investmentuk.org 

Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.