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The Tax Benefits of an ISA

One of the biggest reasons to invest in an ISA is to receive the many tax benefits these savings accounts offer. In fact, these investments are often referred to as a "tax free wrapper," where you can place money to earn interest or returns without having to pay the tax man for any of your earnings. 

The benefits can be used on either cash or shares, which means you get to control the amount of money you can make tax-free. Tax advantages fall into two categories: capital gains tax and income tax benefits.

ISA Income Tax Benefits

In most situations, any income you earn, through wages, interest or dividends, is subject to income tax. However, that is not the case with ISAs. All of the money you earn on these savings vehicles is completely tax free.

Income tax benefits are just part of the equation when you are considering an ISA, however. The other advantage to these accounts is the capital gains tax benefits you can enjoy.

ISA Capital Gains Tax Benefits

Capital gains tax benefits specifically apply to stocks and shares ISAs. Most investment products are subject to a capital gains tax if the amount of earnings from your shares in a single year exceeds the set limit. This tax requirement is waived for investments in ISAs, making them definitely worthwhile for those who plan to sell or make a great deal from their investment vehicles in a given year.

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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