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Investment ISA Rules

Investment ISA Rules

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Investment ISA Rules

Investment ISAs are an easy way for people to begin saving and potentially see higher returns than with a regular ISA. Many accounts manage your funds for you or provide you with a simple selection that you can choose. It’s tax-efficient wrapper which protects your investments from capital gains tax and personal tax.

An Investment ISA can be a good way to put aside some money each month or invest some extra cash. This kind of account isn’t the best if you don’t have any other savings or are in debt because you won’t be able to access your money easily if you need to and you could make losses.

However, Investment ISAs have the potential to provide better returns than any other savings account.

Investment ISA Rules:

  1. The gains you make on your investment are not counted as part of your stocks and shares ISA allowance
  2. If you sell any shares in your ISA, then the proceeds can be reinvested within the ISA and will not count towards your annual allowance
  3. Everyone over the age of 16 has an ISA allowance, and if you’re over 18 you can have an Investment ISA

All Stocks and Shares ISAs charge some kind of account fee. Make sure you check before you apply

You can transfer from a Cash ISA in to a Stocks and Shares ISA and vice versa (usually after selling your investments) watch out for transfer fees.

What to Consider when Choosing a Stocks and Shares Provider?

  1. Firstly, assess the level of risk you’re willing to take, most providers can filter assets depending on the level of risk you’re willing to take or even provide you with a ready-made portfolio
  2. Low risk investing tends to focus on bond funds which pay interest or dividends regularly, whereas higher risk portfolios tend to focus on property investment and the stock market
  3. Providers often hold a limited amount of carefully selected options to invest in whereas others have a much larger range of funds. Work out which is right for you
  4. Some providers have a simple interface with clear copy about each investment and its past performances. Make sure you find one that you find easy to use, helpful and clear

Some providers allow you to hold cash in your account, ready to invest whenever you choose. You can even earn interest on that money so make sure your potential provider offers this if you think you may need this option

What is Bed & ISA?

Bed & ISA is a term which involves selling your non-ISA investments and then using the proceeds to buy them back immediately but with the ISA wrapper. This means you use your annual tax-free allowance and therefore, save tax on your assets.

Oliver Roylance-Smith
Edited by Oliver Roylance-Smith - ISA.co.uk
Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

Lifetime ISAs

Save for your first home and retirement

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Junior ISAs

Invest for your child’s future

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Stocks & Shares ISAs

Invest tax-free in stocks and shares 

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Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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