7,000 limit for 1999/2000 (including ₤3,000 cash) thereafter

₤5,000 overall annual investment limit of which ₤1,000 can be used to purchase life assurance. This means that an individual could have his ISA administered by 1-3 managers.

Gordon Brown also removed advance corporation tax (ACT). This will have a direct effect on the return achieved by pension funds and the asset allocation that will now require to be adopted if previous objectives are to be met.

In summary the pension funds are now not able to reclaim the corporation tax suffered on dividends from their investments, with the direct result of lesser investment returns. Thus individuals may have to raise their level of contributions to maintain the desired level of benefits until:

the full details of the pension arrangements which the new government intends to launch;
we receive the final rules which apply to ISA's;
how the PEP's will be absorbed into the new ISA's
the rules re life policies are put in place.


It is clear that the financial adviser/planner is not now in a position to respond to what were previously simple questions. This hiatus may well impact on the level of business written in the immediate future, or until the uncertainty is removed, by further government announcements.

By considering the effect of these issues on the client profiles detailed in the section entitled "Types of Plans" we will be in a better position to understand and assess the impact of these issues both individually and collectively.