How do ISAs work?

What are ISAs?

Individual Savings Accounts (ISAs) allow you to invest up to £7,200 a year in a tax-efficient shelter.

Tax Benefits

• No Capital Gains Tax on any profit made within the ISA
• 20% tax refund on income received on fixed interest securities (such as gilts and corporate bonds)
• No loss of tax relief on remaining investment if you make a withdrawal.

Contributions

 

There are two main types of ISAs:

1.Stocks and Shares ISA

• You can use your full ISA allowance of £7,200 in a Stocks and Shares ISA.
• If you subscribe any amount to a Cash ISA in the same year, you can subscribe the remainder of your allowance to a Stocks and Shares ISA.

2. Cash ISA

• You can subscribe up to £3,600 of your £7,200 annual allowance into a Cash ISA.
• You can subscribe the remainder of your allowance to a Stocks and Shares ISA. 

 

Some important ISA rules

You cannot subscribe more than £7,200 in total to a Cash ISA and a Stocks and Shares ISA each tax year.

You can only subscribe to one Stocks and Shares ISA per tax year. If you subscribe to either our ISA you will not be able to subscribe to any other Stocks and Shares ISA in that tax year.