Individual Savings Accounts (ISAs)
Introduction
An Individual Savings Account (ISA) is a tax-advantaged means by which investors may save and invest without incurring income or capital gains taxes on the proceeds.
You may invest in a combination of the following types of asset: cash deposits, stocks and shares and life assurance investments.
Cash deposits: qualifying investments include bank and building society deposits, and money market unit trusts. Some National Savings products are also included, as well as a range of existing bonds and accounts on which tax is normally payable.
Stocks and Shares: The equity element in an ISA may include any authorised unit or investment trust or open ended investment company (OEIC), as well as any share quoted on a stock exchange recognised by HM Revenue & Customs. You may include direct holdings of gilts, bought with at least five years to go to maturity. There are no global investment restrictions.
Life assurance: investments such as with profits bonds and unit-linked life insurance funds are eligible. Until 5 April 2005, these life assurance products were treated as a separate ISA element. Now, depending on the product, they form part of either a Cash ISA or a Stocks and Shares ISA.
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