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ISA (Individual Savings Account)

ISAs were introduced in 1999 to replace the PEP (personal equity plan). The ISA scheme allows you to put a certain amount each year into various types of savings, with some tax benefits. For example, the interest on a cash ISA is tax free. Although shares held in an ISA are free from capital gains tax, dividends are currently taxed at 10%.

It was announced in the Budget on 16 March 2005 that the overall limit on the annual investment in ISAs will remain at £7,000 until 5 April 2010. The range of qualifying investments has also been extended.

An ISA (Individual Savings Account) may be opened by an individual who is 16 years or over (18 years or over for a TESSA Only ISA) who is resident in the UK or is resident by performing duties as a crown employee overseas (typically a serving member of the armed services or a diplomat or married to a person who performs such duties).

Mini Cash ISAs have a deposit limit of £3,000 each tax year (from 6th April in one year until 5th April in the next year). Note that if you open a Mini Cash ISA you cannot invest in another Mini Cash ISA or a Maxi ISA in the same tax year.

 

 

 

12 April, 2008
 
© 2008 K.R.Wade and Co Ltd