Your guide to ISAs
What is an ISA?
An ISA (Individual Savings Account) is a tax-free way to save or invest. An ISA itself is not an investment in its own right; it is a tax wrapper that you place around an investment which in effect shields it from some or all of the tax that would normally be due. An ISA has a set Annual Allowance – this is the maximum amount you are permitted to invest per tax year.
In order to open an ISA you must be:
- 16 or over for a Cash ISA
- 18 or over for a Stocks & Shares
- 18 or over but under 40 for a Lifetime ISA
- Resident in the UK
- A Crown servant or their spouse or civil partner
You cannot hold an ISA with or on behalf of someone else.
Types of ISAs
There are six types of ISAs
- Cash ISAs
- Stocks & Shares ISAs
- Lifetime ISAs
- Junior ISAs
- Innovative Finance ISAs
- AIM ISAs
Tax benefits of an ISA
- No Capital Gains Tax
- No Income Tax
- Potential for Inheritance Tax benefits (AIM ISA)
- You do not have to declare an ISA on a tax return
For more information on ISAs contact our team.