ISAs
Individual Savings Accounts (ISAs) are available to all UK residents over 18 years of age and cash ISAs are available to UK residents over 16 years of age. ISAs benefit all taxpayers, as any income or capital gains received from investments held within an ISA do not have to be declared to the taxman!
ISAs can invest in;
- Cash
- Stocks & Shares
- Unit Trusts
- Investment Trusts
- Fixed Interest Securities
- Gilts
Recent legislation has changed the ISA rules and come into force in the 2010/2011 tax year.
- The overall ISA limit is £10,200 of which £5,100 can be placed within a cash ISA.
- or the full allowance into a Stocks & Shares ISA.
- You can take out a Stocks & Shares ISA and a Cash ISA in the same tax year subject to the overall limit applicable to that tax year.
Cash ISAs;
Cash ISAs are widely available with different interest rates. It is important however to understand the conditions attached to those rates, for instance access may be restricted in order to achieve that particular rate. The limit for a cash ISA is £5,100 .
Stocks & Shares ISAs;
You can invest £10,200 per tax year in a Stocks & Shares ISA and there is no upper limit on the stocks and shares holdings. Therefore your entire holdings can be in stocks and shares. However if you hold a cash ISA which you have taken out in the same tax year, you will be restricted to the difference between the overall ISA limit of £10,200 and what you have deposited in the Cash ISA. The Stocks & Shares ISA is one account and managed by one provider.
You can invest in one Stocks & Shares ISA and one cash ISA in the same tax year, subject to the overall limit of £10,200 for the 2010/2011 tax year .
NB – Legislation relating to Individual Savings Accounts is subject to change.