Inland Revenue amends test for insurance Isas

The Inland Revenue is to amend the test it uses to differentiate a cash Isa from an equity one in or...

The Inland Revenue is to amend the test it uses to differentiate a cash Isa from an equity one in order to accommodate the merger of the insurance Isa with the stocks and shares component. From 6 April 2005, the insurance Isa will cease to exist and products previously eligible under this component will be moved into the stocks and shares Isa. For collective schemes, the Revenue applies a test to determine whether it is certain or near certain to return more than 95% of initial capital within five years of purchase. If it is, then it qualifies as a cash Isa. With insurance, especially...