ISA allowance: ISA limits & rules
An Individual Savings Account or ISA is a tax-efficient way to save for the future. Each year the government sets an annual allowance which is the maximum you can put into an ISA in any given year. This year you can invest your £20,000 allowance into a Stocks & Shares ISA and any gains you make will be free from tax.
*The tax benefits will depend on your individual circumstances and tax rules are subject to change by the government.
”At Signia Invest we're proud to offer flexibility for our clients, whether you're looking to lock your money away for generous returns or require more short-term cash alternatives that provide greater protection and accessibility - At Signia Invest you can grow your wealth the way you want to.
Carnegie SmythSignia Invest Founder
The Signia ISA – an easy and tax-free way to save or invest for the future.
- Ready made portfolios to match your appetite to risk
- Managed by our awarding winning team
- What is an ISA?
- How much can I invest?
- Who can open an ISA?
- What is a stocks and shares ISA?
- Will I be taxed on my ISA?
What is an ISA?
An ISA or an Individual Savings Account provides investors or savers a way to receive any returns on investments held in their ISA tax-free. There are 4 main ISAs on the market that are available, you can subscribe to 1 each per tax year providing you are within the annual allowance which is currently £20,000.
The Signia Invest ISA is a stocks and shares ISA. Tax treatment does depend on the individual circumstances however any returns held within your Signia Invest ISA, are free from income and capital gains.
The different ISAs in more detail:
How much can I invest in an ISA
Each tax year, individuals have an allowance that can be paid into ISA accounts, for the current tax year (2020/21) the allowance is £20,000 (for ISA accounts and £9,000 for JISAs).
This can be invested into one ISA or split between the different ISA types.
Crucially, any unused allowance doesn’t roll over – so if you don’t use it, you lose it – forever.
Any savings or investments which stay within the tax-free ISA wrapper will continue to earn interest and benefit from the tax benefits until you withdraw the money. This means it’s possible to have considerable amounts held within an ISA, as some people will take advantage of the maximum allowance each tax year.
Transfers – Any money already in an ISA wrapper can be transferred and will not impact the annual allowance or tax-free status.
Who can open an ISA?
You need to be a UK resident aged 16 or over to open a cash ISA, or aged 18 or over to open a stocks & shares ISA or innovative finance ISA. You can’t open an account with someone else, or on behalf of someone else.
The Signia Invest ISA is a stocks and shares ISA, therefore anyone wanting to subscribe has to be a UK resident aged 18 or over.
Will I be taxed on my ISA*?
ISAs provide preferential tax treatment which means investors:
- Do not have to declare any income or capital gains on a self-assessment form.
- Any returns earned on any investments held in an ISA will be received gross and will not be subject to capital gains or income tax
- When selling investments any losses are not included for capital gains tax purposes
*The tax benefits will depend on your individual circumstances and tax rules are subject to change by the government
Why choose Signia for your ISA?
The Signia ISA – an easy and tax-free way to save or invest for the future
- Ready made portfolios to match your appetite to risk
- Managed by our awarding winning team