Individual Savings Accounts (ISAs) are wrappers within which a wide range of savings and investment products can be held, free of UK income and capital gains tax.


How do they work?


ISAs serve as a ‘wrapper’ to fully protect savings from tax, allowing individuals to invest monies up to the maximum
limits each year in a range of savings and investments and pay no personal tax at all on the income and/or profits received.

The main ISA benefits are:

  • No personal tax (income or capital gains) on any investments held within an ISA
  • Income and gains from ISAs need not be included in tax returns
  • Freely withdraw money from your ISA without losing

The five types of ISA:


  • Stocks & Shares
  • Cash
  • Innovative Finance (IF-ISA)
  • Lifetime ISA (LISA) 
  • Junior ISA (JISA)


Utilise your allowance


All your annual allowance can be invested in either stocks & shares, cash, innovative finance ISAs or lifetime ISAs.

Alternatively, you can split it between more than one type, up to the overall annual limit of £20,000, with either the same
or a different provider. However, the maximum annual amount you can save in a lifetime ISA is £4,000.

You will also be able to transfer money saved in previous years’ cash ISA holdings to stocks & shares ISAs and vice versa
without affecting your current year’s annual allowance. Innovative Finance ISAs cannot be transferred to other ISA
wrappers, however it is possible to transfer existing ISA funds into IF-ISA.


Contribution Limits


The current ISA overall maximum annual contribution limit is £20,000.



Any investment returns received from an ISA will be tax-free. There is no personal tax on any income taken and no capital gains tax on any gains made. The value of your ISAs will be included in your estate for Inheritance Tax purposes on your death (except ISAs invested in shares listed on alternative investment markets that may qualify for Business Relief).


Download our fact sheet.


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