ISA – Individual Savings Account

Invest in ISA investment funds to use your tax-free ISA savings allowance. You can invest up to the ISA investment limit of £20K per Tax-Year. Your ISA savings will grow free from personal Income and Capital Gains Taxes which will help to boost the rate of growth on your savings.

ISA

An ISA (Individual Savings Account) is a tax-efficient investment wrapper.

You have an ISA allowance of £20,000 in each Tax-Year. This is the upper limit on how much money you can invest in an ISA.

There are four different types of ISA:

  1. cash ISA,
  2. stocks and shares ISA,
  3. Lifetime ISA, and
  4. innovative finance ISA.

You can invest in one of each type of ISA in a Tax-Year but you can’t invest in two different ISAs of the same type in the same Tax-Year.

Independent Financial Advice

You can invest up to £20,000 in each Tax-Year.

Choose to invest in either cash or market linked investments.

You have access to a comprehensive range of investment funds.

You pay no personal taxes on your profits and no tax on withdrawals.

“We give candid, impartial, effective, plain English financial advice.”

Those who take financial advice are on average £47,000 better off than those that don’t

FT Adviser, November 2019

FAQ

Frequently Asked Questions

The information provided in these FAQs does not constitute professional financial advice. We strongly recommended that you consult a professional adviser before proceeding with a financial transaction.

How much can I pay into an ISA?
The annual ISA subscription limit (the ISA Allowance) is £20K per Tax-Year.
Is an investment ISA a good idea?

Yes. An investment ISA (Individual Savings Account) is a tax-wrapper in which you can buy, hold and sell investments. Any gains or income you earn on your investments in an ISA wrapper will be free from personal Income and Capital Gains Taxes, you may pay on any investments you hold outside an ISA (or pension) wrapper.

The value of an investment and any income from it may fall as well as rise, and you may not get back the full amount you invest.

What should I invest in an ISA?

If you have surplus capital to invest you should consider using your annual ISA subscription allowance of £20,000 before you make an investment in other types of investment wrappers. This is because the profits you earn on an ISA investment are free from personal taxes. Conversely, the profits you earn on investments held outside an ISA (or pension) wrapper may be taxable.

Can you put £20,000 in an ISA every year?

Yes, the annual ISA subscription allowance is £20,000 per Tax-Year. A new Tax-Year begins every year on the 6th April. Hence, say you haven’t used your ISA subscription allowance for the current Tax-Year, and you invest £20,000 at the end of March. You could invest another £20,000 a few weeks later, as long as your second investment is made after 6th April.

How does an ISA work?

An ISA is a tax-wrapper. It makes the profits you earn on your investment (in cash, equities or bonds) free from from personal taxes. Most ISAs are administered via an investment platform, to which you or your adviser (or both of you) have online access. You or your adviser can instruct the purchase and sale of your preferred investments via the investment platform.

The value of an investment and any income from it may fall as well as rise, and you may not get back the full amount you invest.

Can I take money out of my ISA?
There are usually no restrictions on withdrawals from an ISA. Your withdrawals will be tax-free and don’t need to be declared on your Self Assessment Tax Return.
How does an ISA make money?

You can invest in stocks and shares, bonds or cash via an ISA wrapper. Your preferred investments could grow either because the price of your stocks or shares has increased, because your stocks have paid a coupon, because your shares have paid a dividend or because your cash has earned interest.

The value of an investment and any income from it may fall as well as rise, and you may not get back the full amount you invest.

Is income from an ISA tax-free?
The profits you earn from your ISA investments are free from personal taxes. Any withdrawals you take from your ISA are tax-free and you don’t need to declare them on your Self Assessment Tax Return.
When should I open an ISA?
The last day of the Tax-Year is the 5th April. If you haven’t made full use of your annual ISA subscription allowance of £20,000 for the current Tax-Year, and you have surplus capital available to invest, you should try to invest your capital before this date. You can’t carry forward an unused ISA subscription allowance i.e., if you don’t use it, you lose it!

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Neil Jenkins owner of Fintegrity

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