ISAs
Individual Savings Accounts (ISAs) is the name of the tax advantageous form of savings offered by various providers, which are available to UK residents. Any dividend income received from an ISA comes with a 10% tax credit attached, however no further tax is payable (the tax credit is non reclaimable) and there is no tax payable on capital gains arising from the investment.
An ISA can be made up of an investment in cash or stocks and shares. On 6 April 2008 some key changes were made to the ISA rules :
The annual investment allowance is now £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The rest can be invested in stocks and shares with either the same or a different provider.
You can invest in two separate ISAs each tax year - a cash ISA or a stocks and shares ISA.
Mini and Maxi ISAs no longer exist
Mini cash ISAs, TESSA-only ISAs and the cash component of a Maxi ISA automatically became cash ISAs, and
Mini stocks and shares ISAs and the stocks and shares component of a Maxi ISA automatically became stocks and shares ISAs.
Personal Equity Plans (PEPs) automatically became stocks and shares ISAs
You can transfer money saved in a cash ISA to a stocks and shares ISA - but you can't transfer money the other way.
With each new tax year an investor will be able to take up a new ISA, subject to Government legislation at the time.