Individual Savings Accounts (ISAs) are not actual investments; they are a tax-efficient wrapper surrounding your fund choices. When you make an ISA investment you pay no income or capital gains tax (CGT) on the returns you receive, no matter how much your investment grows or how much you withdraw over the years.<\/p>\n
An ISA is an ideal way to make the most of your tax-efficient savings limit and save for the future.\u00a0The value of tax savings and eligibility to invest in an ISA will depend on individual circumstances and all tax rules may change in the future.<\/p>\n
Saving or investing in an ISA<\/strong><\/p>\n To save or invest in an ISA you must be: <\/strong><\/p>\n a UK resident<\/p>\n a\u00a0Crown employee (such as diplomat)<\/p>\n a member of the armed forces (who is working overseas but paid by the government), including\u00a0husbands, wives or civil partners<\/p>\n aged over 16 years for the Cash ISA component, and over 18 years for the Stocks and Shares ISA component<\/p>\n An ISA must be in your name alone; you can\u2019t have a joint ISA.<\/p>\n ISA options<\/strong> In the current 2011\/12 tax year you can invest a total of \u00a310,680 into an ISA if you\u00a0are a UK resident aged 18 or over. You can save up to\u00a0\u00a35,340 in a Cash ISA, or up to a maximum of \u00a310,680 in a Stocks and Shares ISA.<\/p>\n Total ISA investment allowed Cash ISA only<\/strong> or<\/p>\n Stocks & Shares ISA only<\/strong> or<\/p>\n Cash ISA and Stocks & Shares ISA<\/strong> Tax-efficient matters<\/strong> If you hold bond funds in your ISA, the income generated would be free of income tax. This could be a real benefit if you need to take an income from your investments,\u00a0perhaps as you near retirement. Even if you don\u2019t want to invest in bonds at the moment, you may want to move money from equity funds into bonds in the future, perhaps when you need to take an income from your investments or if you want to reduce the level of risk in your portfolio as you near retirement.<\/p>\n Transferring your ISA<\/strong> ISAs must always be transferred; you can\u2019t close the old one and start a new one, otherwise you will lose the tax advantage. If appropriate, you may wish to consider switching an existing Stocks and Shares ISA if you feel the returns are not competitive. But if you have a fixed-rate ISA, you should check whether you may have to pay a penalty when transferring.<\/p>\n For further information about your ISA options, please contact us discuss your requirements. <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" A tax-efficient wrapper surrounding your fund choices Individual Savings Accounts (ISAs) are not actual investments; they are a tax-efficient wrapper surrounding your fund choices. When you make an ISA investment you pay no income or capital gains tax (CGT) on the returns you receive, no matter how much your investment grows or how much you… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1476"}],"collection":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1476"}],"version-history":[{"count":0,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1476\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nYou can invest in two separate ISAs in any one tax year: a Cash ISA and a Stocks and Shares ISA. This can be with the same or different providers. By using a Stocks and Shares ISA, you invest in longer-term investments such as individual shares or bonds, or pooled investments.<\/p>\n
\nin the tax year 2011\/12:<\/strong><\/p>\n
\n\u00a35,340 maximum in a Cash ISA<\/p>\n
\n\u00a310,680 maximum in a Stocks & Shares ISA<\/p>\n
\nNo more than \u00a35340 in a Cash ISA and the balance in a Stocks& Shares ISA Up to a combined total of \u00a310,680<\/p>\n
\nISAs are tax-efficient investments with no income tax on any income taken from the ISA. There is no CGT on any gains within an ISA. Interest paid on uninvested cash within the Stocks and Shares ISA is subject to a 20 per cent HM Revenue & Customs (HMRC) flat rate charge. Interest received in a Cash ISA is tax-efficient. Dividends from equities are paid with a 10 per cent tax credit which cannot be reclaimed in an ISA but there is no additional tax to pay. You don\u2019t have to inform the taxman about income and capital gains from ISA savings and investments.<\/p>\n
\nIf you have money saved from a previous tax year, you could transfer some or all of the money from your existing Cash ISA to a Stocks and Shares ISA without this affecting\u00a0your annual ISA investment allowance. However, once you have transferred your Cash ISA to a Stocks and Shares ISA it is not possible to transfer it back into cash.<\/p>\n