ISA stands for Individual Savings Account.
A savings account of this type, called cash ISA, is shielded from financial taxation for a capital of up to £3,600 in a tax year. Therefore, within this figure, you don’t pay tax on the interest on savings.
In a stocks and shares ISA, the no-tax limit is increased to £7,200. So, up to this sum, you don’t pay tax on the capital gains on investments.
ISA is the acronym for Individual Savings Account.
In an ISA you can save up to £7,000 each financial year, which runs from 6th April until the 5th April the following year.
You must be 18 years or over to open an ISA. If you are aged between 16 and 18 you can enter a Mini Cash ISA or the cash component of a Maxi ISA.
Individuals who are both resident and ordinarily resident in the UK for tax purposes are eligible to subscribe to an ISA account.
Returns from ISA savings are free of income tax and capital gains tax, except dividends, which are subject to 10% income tax.
