Tax Exempt Special Savings Account

= Tessa
A UK savings account with a bank or building society, introduced in January 1991, in which savers were allowed to invest up to £9000 over a five-year period with no tax to pay on their interest, provided that special conditions were met. Savers investing in a Tessa for the first time could deposit up to £3000 in the first year and £1800 in any subsequent year (the maximum of £1800 could only be invested in the fifth year if a reduced amount was invested in one of the previous years). Savers with a matured Tessa could invest all the capital (i.e. up to £9000) from this account in a new Tessa during the first year, provided the new account was opened within six months of the maturity date of the old Tessa. The tax exemption was lost if: (a) capital was withdrawn at any time; (b) withdrawals of interest or bonuses exceeded 80% of the total amount of these credited to the acount prior to the withdrawal; (c) the account holders' rights were assigned or used as security for a loan. Tessas were replaced by Individual Savings Accounts (ISAs) in April 1999; however, existing Tessas were allowed to continue under the same arrangements until their term expired.

Accounting dictionary. 2014.

Look at other dictionaries:

  • Tax-Exempt Special Savings Account — In the UK, the Tax Exempt Special Savings Account (TESSA) was one of a number tax free savings accounts. The TESSA was announced by John Major in his only Budget as Chancellor of the Exchequer in 1990 ( a budget for savings ). The TESSA was… …   Wikipedia

  • Tax Exempt Special Savings Account — Tessa A UK savings account with a bank or building society, introduced in January 1991, in which savers were allowed to invest up to £9000 over a five year period with no tax to pay on their interest, provided that special conditions were met.… …   Big dictionary of business and management

  • Tax Exempt Special Savings Account — ( TESSA) A savings account which generates tax free interest for the investor. The account must be kept open for five years, at which time it must expire. The maximum amount that may be invested in the account is £9,000 in total over the five… …   Financial and business terms

  • Tax Exempt Special Savings Account — Fin a U.K. savings account in which investors could save up to £9,000 over a period of five years and not pay any tax provided they made no withdrawals over that time. The advent of the ISA in 1999 meant that no new accounts of this type could be …   The ultimate business dictionary

  • tax-exempt special savings account — /tæks ɪgˌzempt ˌspeʃ(ə)l seɪvɪŋz əˌkaυnt/ noun formerly, an account into which money can be placed to earn interest free of tax, provided it is left untouched for five years. Abbreviation TESSA …   Dictionary of banking and finance

  • tax exempt special savings scheme — (TESSA) A special bank or building society savings account that offered tax free interest provided that the account was maintained for a fixed period of five years. TESSAs were replaced by individual savings accounts (ISAs) from 6 April 1999… …   Law dictionary

  • Individual Savings Account — An Individual Savings Account (ISA; pronounced /ˈaɪsə/) is a financial product available to residents in the United Kingdom. It is designed for the purpose of investment and savings with a favourable tax status. Money is contributed from… …   Wikipedia

  • individual savings account — (ISA) A tax exempt savings scheme for individuals introduced in 1999 which replaces tax exempt special savings schemes (TESSAs) and personal equity plans (PEPs). For further information, see the HM Revenue & Customs website …   Law dictionary

  • Individual Savings Account — ISA A savings portfolio for small investors introduced in the UK in 1999. It replaced personal equity plans (PEPs) and Tax Exempt Special Savings Accounts (TESSAs); ISAs entitle individuals to save up to £7000 per year free of tax. The savings… …   Accounting dictionary

  • Individual Savings Account — ISA A savings portfolio for small investors introduced in the UK in 1999. It replaced personal equity plans (PEPs) and Tax Exempt Special Savings Accounts (TESSAs); ISAs entitle individuals to save up to £7000 per year free of tax. The savings… …   Big dictionary of business and management

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