- Protection Scheme: FSCS
- Fund Choice: Fully Managed Portfolio
- Invest From: Min. £500 single (+ £100 pm for ISAs below £5,000)
ISAs were established to encourage Brits to save more each year.
The largest advantage to an ISA is that you don't have to pay any taxes on the money you earn. This includes interest earned on cash ISAs, as well money made from sales of shares within investment ISAs. However, those tax advantages also mean a few rules apply to setting up and contributing to ISAs every year.
Each person is allowed to open one ISA each tax year. The current 2017-18 ISA allowance is £20,000 per individual.
If you err and open more than one cash or shares ISA in a single tax year, it is important to notify your fund manager or bank right away. In some cases, the ISA may be allowed to remain open, once you have consulted with HM Revenue and Customs.
Once your ISA is open, you can leave it for as long as you like. You can add to your current ISAs each year, or open entirely new accounts. Keep in mind that if you continue to open new accounts, you will need to monitor them regularly to ensure they are earning the best returns possible.
Some individuals do not like the idea of having multiple ISAs because of the difficulty tracking them, while others like the diversity that more than one or two ISAs offer.
Instead of opening news ISAs each year, you also have the option to transfer current ISAs into different types of accounts. If you do decide to transfer ISA money, do not simply withdraw funds to move them, or you will lose your tax advantages for that year. Instead, initiate the transfer through the receiving manager or institution so your transaction is counted as a transfer, rather than a withdrawal.
By understanding the rules regarding ISAs, you can make the most of your money without fear of penalty or losing your tax advantages.
This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
ISAs are a tax-advantageous way to save or invest, check out some of the ISA options below
There are a range of types of fund ISA
23rd May 2017
The New ISA Allowance Is £20,000 Per Person.
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