Individual Savings Accounts (ISA)

An Individual Savings Account (ISA) allows anyone aged 18 or over to save up to a certain limit (£20,000 in 2021/22) each year and not pay tax on the income you receive from the investment. Junior ISA’s are available for those under 18 to invest up to a lower limit (£9,000 in 2021/22).

They are now a permanent feature of the savings landscape.

Tax Advantages of ISAs

All income from the ISA is received tax free.
There is no capital gains on the investment.
Money is not locked in by the tax rules although some accounts will have notice periods. However, if you withdraw funds you will only be able to re-invest later in the same tax year up to the balance remaining on your investment limit.
They are not reportable to HMRC.

Transferring an ISA

You can transfer your ISA to another ISA manager if it is the same type of ISA. For example, you can’t move funds from a cash ISA with one manager to a stocks and shares ISA with another.

You cannot do this yourself by closing one and paying the money to another ISA manager. The transfer must be directly between the existing ISA manager and the new one and in some cases there may be a charge for transferring.