FTSE Tracker Fund ISA

What are FTSE tracker fund ISAs

FTSE tracker fund ISAs, or passive investments, are ISAs that are heavily dependent on the behaviour of the world’s biggest economic market indices such as the FTSE, Dow Jones or Nasdaq.

A FTSE tracker fund ISA is a tracker ISA that specifically determined by the FTSE 100 index. 

The FTSE tracks the share prices of the 100 largest companies listed on the London Stock Exchange and is widely recognised as the proxy benchmark for most investment managers.

Why invest through an ISA

A FTSE tracker fund ISA may be a good option for you if you want to avoid the effect of tax on your capital. This is because any return from a regular investment is subject to capital gains tax.

Therefore, you may receive a dividend that is significantly smaller than you think because a certain percentage of it has to be paid as tax.

FTSE tracker funds ISAs allow you to put your capital into an investment and receive a dividend that is not subject to tax (up to a government agreed limit). 

The tax-free interest limit for ISAs currently sits at £20,000, but this is likely to change in the near future.

If you want to make an investment, but you do not want to pay tax on your returns, you could use a FTSE tracker fund ISA.

In addition, with a FTSE tracker funds ISA, you do not have to complete a self-assessment form upon receipt of your returns.

Eligibility

To qualify for a tracker ISA you need to be:

1. Aged 18 years or over
2. A UK resident and tax payer