ISAs - The easiest way to protect your hard-earned savings from the taxman
CommShare’s service is ideal if you’re happy to choose your own ISAs
Save up to £587.40 instantly when you invest £10,680 in an ISA, then get cashback every year. Choose from over 1,000 ISA funds offered by companies like Artemis, Fidelity, Jupiter, Invesco Perpetual and many more.
Invest in ISAs the way you want - online or by paper application, with the fund companies or through fund supermarkets. Save time managing your ISA funds - by viewing your valuation and fund performance information in one easy to use online account - FUNDSFOLIO.
Tax benefits
ISAs (Individual Savings Accounts) encourage you to save in cash, stocks or shares by offering tax incentives.
You will often hear ISAs referred to as “tax wrappers” because they go around your savings, protecting you from paying certain taxes.
Invest up to £10,680 in a Stocks and Shares ISA
For this tax year, started 6 April 2011, you can invest up to £10,680 in a Stocks and Shares ISA. From next tax year, starting 6 April 2012 you will be able to invest up to £11,280 in a Stocks and Share ISA.
Income Tax
- Interest from savings in the cash component of an ISA are free of income tax.
- All dividends are tax free, but the 10% tax credit on UK share and unit trust dividends cannot be reclaimed. Higher and additional rate taxpayers are therefore exempt from paying 22.5% and 32.5% additional tax on dividends from equity investments.
- Fixed interest distributions on corporate bonds held in ISAs are completely tax free.
- Interest paid on cash held temporarily in a stocks and shares ISA is taxed at 20%, but higher and additional rate tax payers do not pay any more tax.
Capital Gains Tax
- All gains from any investments are free of Capital Gains Tax. However, losses cannot be offset against gains elsewhere.
The ISA manager either receives income gross, or reclaims tax from HM Revenue and Customs. You don’t have to do anything, you don’t even have to declare ISAs on your tax returns.
Types of ISAs
There are two types of ISA, Cash ISAs and Stocks and Shares ISAs. In any tax year you can invest in either or both types.
- Cash ISAs: Includes bank and building society deposit accounts, National Savings and Investment products and investment or insurance products that aim to produce cash like returns.
- Stocks and Shares ISAs: Includes individual stocks and shares, unit trusts, open ended investment companies (OEICs) and investment trusts.
CommShare arranges unit trust/OEIC based Stocks and Shares ISAs. CommShare doesn’t arrange Cash ISAs or ISAs that allow you to invest in individual stocks and shares - often referred to as self-select ISAs.
ISA limits
You can invest up to £10,680 each year in ISAs. You can invest lump sums or regularly, subject to minimum amounts that vary by company. The way your £10,680 allowance is divided up depends on the type of ISA you choose.
You can invest up to £5,340 in a Cash ISA and up to £10,680 in a Stocks and Shares ISA, subject to an overall limit of £10,680 in each tax year.
You can transfer some or all of your Cash ISA to a Stocks and Shares ISA at any time, but not the other way round.
Are you eligible?
- You must be 16 or over (although until your 18th birthday you can only invest in cash ISAs).
- You must be UK resident for tax purposes.
- You cannot hold an ISA jointly, or hold one on behalf of anyone else.