WITH the sale of tax-efficient independent savings accounts (ISAs) in full swing ahead of the end of the financial year on April 5, Salisbury financial adviser Bob Collom is warning of three important changes affecting investors.

Mr Collom, from the Salisbury office of Thomson's Group, said the most significant was the time limit set by Chancellor of the Exchequer Gordon Brown on the top amount that it is possible to shelter from tax in an ISA each year.

"At the moment the maximum is £7,000 a year, of which £3,000 can be in the mini-cash ISA version," he said.

"But the Chancellor has ruled that from 2006-07, the limits will be reduced to £5,000 and £1,000 respectively.

"Investors need to make sure they maximise their tax-free opportunities while the going is good."

Mr Collom said the second change was that life insurance funds would count as investments for stocks and shares ISAs from April 2005, thereby removing the need for separate insurance ISAs.

The third change was the withdrawal of tax credits on share dividends, from April 6 this year.

Mr Collom said: "This tax change affects only dividend income, so all taxpayers with bank or building society savings can still benefit from mini-cash ISAs, as they will get their interest tax free.

"It is also worth remembering that you can't carry your annual ISA entitlement forward from one tax year to the next, so unless you invest before April 5, you will lose this year's allowance."