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Prize draw for ISA holders scrapped

The Government has revealed further changes to its proposals for the Individual Savings Account. These include ditching the idea of a monthly prize draw and banning demutualisation shares.

Previously, windfall shares were popular with Peps because they offered a tax shelter without counting towards an individual&#39s Pep allowance.

Savers will also have the choice of a single fund manager or separate managers for their ISA.

The Government remains keen on the possibility of a voluntary benchmarking system for components of the ISA. It will be issuing a consultative document.

Rules which restrict the scope of investments in Peps will also be relaxed and simplified for investments in the ISA. Guinness Flight Hambro says the relaxed rules will enable fund managers to introduce the tax-free investor to a host of foreign markets.

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