Share ISA

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Share ISA

Individual Savings Accounts were introduced by the UK Government in 1999 to replace PEPs (Personal Equity Plans), a similar tax efficient savings account that would allow people to invest in cash or stocks and shares.

Adult savers get an annual total investment allowance of £7,200 which be invested completely into a stocks and shares ISA. Another option is to split the investment between a stocks and shares ISA and a Cash ISA, with either the same or a different provider.

What is a Stocks and Shares ISA?
A Stocks and Shares ISA comprises of funds such as unit trusts, OEICs or investment trusts. When you take out the ISA you can elect to invest money directly into equities, life assurance, gilts or corporate bonds.

You can invest up to £7,200 into a stocks and shares ISA for the tax year 2008/2009 and there are many investment options to choose from.

Use the YourHomeBills.com savings calculator to find the right stocks and shares ISA for you.

Who will provide my ISA?
There are many individual ISA managers and whilst the majority offer both components, there are some that only offer cash ISAs or Stocks and Shares. Each provider offers different rates of return, charging structure and a varying degree of service.

Due to the increasing number of ISA providers it is could be in your interest to invest your money with two separate ISA managers.

Use the YourHomeBills.com savings calculator to find the right stocks and shares ISA for you.

What about the ISAs, PEPs and TESSAs I have previously invested in?
If you have previously invested money into mini cash ISAs, TESSA-only ISAs (TOISAs) or a cash component of a maxi ISA, from the 6th April 2008 these will automatically become cash ISAs. You may even have invested your money in mini stocks and shares ISAs or maxi ISAs which from this date will become stocks and shares ISAs. If you have a PEP (Personal Equity Plan) then this will become a stocks and shares ISA.

What are the tax advantages of an ISA?
All ISAs benefit from tax-efficient growth and so you will not have to pay income tax or capital gains tax when you finally withdraw your cash at the end of the term. ISA interest does not need to be declared on tax returns.

Use the YourHomeBills.com savings calculator to find the right stocks and shares ISA for you.