An Individual Savings Account (ISA) is a\u00a0tax-efficient wrapper. Within an ISA you pay no capital gains tax and no further tax on the income, making it one of the most tax-efficient savings vehicles available.<\/p>\n
The earlier and the more you add to your ISA the better. But the crucial thing to remember is that every tax year \u2013 which runs from 6th April one year to 5th April the next year \u2013 you’re only allowed to invest a certain amount in an ISA. This is known as your annual ISA allowance.<\/p>\n
If you are planning to open or transfer an existing ISA, you have until 5th April, but don’t leave it until this date. If you miss the deadline, you’ll lose your \u00a311,280 allowance for the 2012\/13 tax year forever.<\/p>\n
Q: What types of ISAs are there? Q: What is a Cash ISA? Q: What is a Stocks and Shares ISA? Q: Who can save in an ISA? Q: How much can I invest? Q: What is a Junior ISA? Q: When should I invest? Q: Will ISAs always be tax-efficient? Q: Can I transfer my existing ISA money? An Individual Savings Account (ISA) is a\u00a0tax-efficient wrapper. Within an ISA you pay no capital gains tax and no further tax on the income, making it one of the most tax-efficient savings vehicles available.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1644"}],"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=1644"}],"version-history":[{"count":0,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1644\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nA: <\/strong>There are two main types of ISAs:
\nCash ISAs and Stocks & Shares ISAs.<\/p>\n
\nA: <\/strong>Cash ISAs work in the same way as normal savings accounts. You choose if you want a fixed rate account, an easy access (or instant access) account or a regular savings account. You don’t pay income tax on the interest you earn. For every \u00a31 of interest you earn on your savings, instead of the taxman pocketing 20p of income tax (if you’re a basic rate taxpayer), you get to keep it all.<\/p>\n
\nA: <\/strong>A Stocks & Shares ISA is another option open to you if you’re looking to invest for at least 5 to 10 years. With a Stocks & Shares ISA you can invest in individual stocks and shares or investment funds. Any profit you make is not subject to capital gains tax. However, you pay 10 per cent tax on dividend earnings.<\/p>\n
\nA: <\/strong>Anyone who is 16 or over and a UK resident can save money in a tax-efficient Cash ISA but to save in a Stocks & Shares ISA you need to be at least 18.<\/p>\n
\nA: <\/strong>As of 6th April 2012, the ISA limit increased for everyone \u00a311,280 per tax year. Of this, the maximum amount you can put into a Cash ISA is \u00a35,640, and then the remainder can be invested into a Stocks & Shares ISA.
\nAlternatively, you may choose to allocate the entire \u00a311,280 into a Stocks & Shares ISA.<\/p>\n
\nA: <\/strong>A Junior ISA is a tax-efficient way to save for a child’s future and can be set up in the child’s name by a parent or guardian. You can set up a Stocks & Shares ISA or Cash ISA or a combination of both and any investment growth is free of UK Income and Capital Gains Tax. The annual investment limit is currently \u00a33,600, but this will rise in line with inflation from 2013. The money is locked away until the child reaches the age of 18, giving the investment time to grow. The child is the beneficial owner of the Junior ISA. Children are not eligible for a Junior ISA if they have or were eligible for a Child Trust fund.<\/p>\n
\nA: <\/strong>As long as you have not exceeded the current \u00a311,280 ISA limit you can invest in an ISA at any point during the tax year and, depending on the ISA provider, you can allocate lump sums or monthly contributions that fit around your lifestyle.<\/p>\n
\nA: <\/strong>The government has promised to keep ISAs indefinitely. However, the
\ntax treatment of ISAs may change in the future<\/p>\n
\nA: <\/strong>You can transfer the money saved in a Cash ISA to a Stocks & Shares ISA, even if it was saved in previous tax years, without affecting your annual ISA allowance. You can also transfer some or all of the money held in previous tax year Cash ISAs into a Stocks & Shares ISA. A stocks and shares investment is a\u00a0medium to long term investment, but remember the value of your investment can go down as well as up, and you may get back less than you originally invested, and that tax rules may change in the future and taxation will depend on your personal circumstances.<\/p>\n","protected":false},"excerpt":{"rendered":"