Individual Savings Accounts (ISAs)
An ISA is not an investment in itself, but a 'wrapper' that shields your investment in cash or stocks and shares from income tax and capital gains tax.
You can usually change the investments you hold within your ISA wrapper if you wish. Some ISA managers have their own rules and restrictions, so it's important to choose carefully. You can also move your ISA from one product provider to another and still preserve your tax benefits, so it is possible to consolidate the different ISAs that you hold.
In April 2008 all Personal Equity Plans (PEPs) became ISAs to simplify these tax-efficient savings schemes.
There are two types of ISA:
- Cash ISA - to which up to £5,340 pa (2011/12) can be contributed
- Stocks & Shares or Investment ISA - to which up to £10,680 pa (2011/12) can be contributed, depending on whether you have also contributed to a Cash ISA in the same tax year.
Any UK-resident saver aged 18 or over can invest in one Cash and/or one Stocks & Shares ISA each tax year. You are able to transfer existing ISAs to other providers without affecting your ISA investment limits.
(Those aged 16 and 17 years of age can only open a Cash ISA.)
The tax advantages of ISAs
- Any income and/or capital gains made within your ISA are tax-free
- Any income withdrawn from your ISA is not deemed 'income' for tax purposes and therefore escapes tax.
This means that you can build your own personal 'tax haven' if you use your allowance every year. However, if you miss the deadline for investing in any given tax year, you will lose that part of your ISA allowance forever.
Barclays Wealth can help you find the right ISAs for you and integrate these investments into your overall wealth strategy.
Legal information
The products and services described on this page are provided by the following company, which is part of Barclays Wealth: Barclays Bank PLC in England & Wales. For further information on these companies and Barclays Wealth please read the Important Information. Each Barclays Wealth company reserves the right to make a final determination on whether or not you are eligible for any particular product or service. Tax treatment depends on your individual circumstances and may be subject to change in the future.
You have sole responsibility for the management of your tax and legal affairs including making any applicable filings and payments and complying with any applicable laws and regulations. We have not and will not provide you with tax or legal advice and recommend that you obtain your own independent tax and legal advice tailored to your individual circumstances.
