What is an ISA?
Individual Savings Accounts (ISAs) are a tax efficient way to save for the long term.
What is an ISA?
An ISA is a wrapper that protects your investments from the taxman. No matter how much your investments grow by or how much you decide to withdraw, your money will be protected from both capital gains and income tax.
The key thing here is that your ISA allowance runs from the 6th April each year to the 5th April the following year. If you don't use it you lose it.
Amount you can invest in the tax year 2009-10
Where you invest in both a Cash ISA and a Stocks and Shares ISA the total amount invested, each tax year, must not exceed the overall maximum of £7,200 or £10,200 respectively.
Who can invest in an ISA?
Simply, to invest in an ISA you must be ordinarily resident in the UK for tax purposes and aged 18 or over (16 for certain cash ISAs).
ISA enhancements
- From the 6th October 2009 the rules regarding how much you can contribute to your ISA will change. Currently the maximum any individual can contribute to their ISA is £7,200. However from the 6th of October 2009, a limit of £10,200 (which may include up to £5,100 in a Cash ISA) will apply to investors whose 50th birthday falls within the 2009/2010 tax year. All investors will be able to invest the higher amounts from 6th April 2010.
- In April 2008 some changes were made to ISAs. For example, all Mini Cash ISAs, Tessa Only ISAs, and any Cash component of a Maxi ISA, are all now simply Cash ISAs. On the same lines, all Mini Stocks and Shares ISAs and the Stocks and Shares component of a Maxi ISA, and PEPs, are now Stocks and Shares ISAs.
- Remember you can now transfer from a Cash ISA to a Stocks & Shares ISA. Please remember you cannot transfer back!
The LV= ISAs' are stock market related investments. The value of investments and any income from them may go down as well as up and is not guaranteed. Past performance should not be taken as a guide to future investment performance. To ensure you fully understand all the risks associated with this investment and the risks to each Fund, please ensure you read the LV= ISA Key Features Document (PDF 221KB - Opens in a new window).
Next steps
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