An Individual Savings Account – ISA – is simply a tax wrapper in which you can hold various investments, such as Cash Deposits, Government or Corporate bonds, listed stock market shares and some collective investments such as Open Ended Investment Companies (OEICS) Investment Trusts and Unit Trusts. With the exception of the Junior ISA, you must be aged at least 18 and be a UK resident to invest in an ISA.

ISAs confer various tax advantages and do not need to be declared in your tax return: no Capital Gains tax is payable on gains made within an ISA, nor is the interest earned from cash deposits subject to income tax or the coupon received from Government or Corporate Bonds. Tax already paid on company shares is not however reclaimable.

ISAs are a valuable tool in financial planning, as they offer similar tax treatment to a Pension fund but without the restrictions on accessing the funds. Whilst you receive no tax relief on contributions made to ISAs, you do not pay any tax on the money when withdrawing it. The fact that they offer these tax advantages also means that there are limits on how much can be invested in them.

There are various types of ISA and if you would like more information please get in touch with us. Below are the current annual investment limits: