Friday 19th October 2007
Britons who drained savings accounts they held with Northern Rock recently are to have their individual savings account (Isa) tax-free allowance reinstated, the government has stated.
Economic secretary Kitty Ussher explains that deposits need not be returned to Northern Rock but may be put into an Isa with any provider.
"The government will allow the people affected to re-invest their money into any cash Isa - including Northern Rocks - and thereby restore their tax advantages," she asserts.
Exclusions have been put in place to ensure that consumers who have already made deposits during this tax year do not exceed the £3,000 maximum which is permitted to be tax-free under the Isa system.
But HM Treasury adds that Britons who do exceed the limit will be contacted to inform them of the surplus.
It recently emerged that Northern Rock is in talks with a number of bidders, including a consortium led by Virgin Money, about a possible buyout - although the institution claims any such discussions are at an early stage.
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