Important information - investment value can go up or down and you could get back less than you invest. If you're in any doubt about the suitability of a Stocks & Shares ISA, you should seek independent financial advice. The tax treatment of this product depends on your individual circumstances and may change in future. If you are uncertain about the tax treatment of the product you should contact HMRC or seek independent tax advice.
What is a Stocks and Shares ISA?
A stocks and shares ISA - or investment ISA - is a tax-free savings account. The money you put in can be used to buy shares, funds, ETFs and other types of investment.
Any investments you make in the ISA are sheltered from UK income tax and capital gains tax. However, there is a maximum ISA allowance of £20,000 per year that you can invest in a stocks and shares ISA.
What are the Stocks and Shares ISA tax benefits?
Investing in a stocks and shares ISA gives you several tax benefits:
- No tax on profits or capital gains
- No tax on interest earned on bonds
- No tax on dividend income.
Remember that there is always a risk that your investments can go down as well as up. You should not invest money that you can’t afford to lose.
Stocks and shares ISA rules
There are a few rules you will need to be aware of before you start investing in an ISA: