What is an ISA?
An ISA (Individual Savings Account) is a tax-efficient way to save or invest. An ISA itself is not an investment in its own right; it is a tax wrapper that you place around an investment which in effect shields it from the income and capital gains tax that would normally be due.
In order to open an ISA you must be:
- 16 or over for a Cash ISA
- 18 or over for a Stocks & Shares
- 18 or over but under 40 for a Lifetime ISA
- Resident in the UK, or a Crown servant) or their spouse or civil partner) working overseas
You cannot hold an ISA with or on behalf of someone else.
Types of ISAs
There are six types of ISAs
- Cash ISAs
- Stocks & Shares ISAs
- Lifetime ISAs
- Junior ISAs
- Innovative Finance ISAs
- AIM ISAs
Tax benefits of an ISA
- No Capital Gains Tax
- No Income Tax
- Potential for Inheritance Tax benefits (AIM ISA)
- You do not have to declare an ISA on a tax return
You can find out more about ISA’s by downloading our fact sheet.