Stocks and Shares ISA Guide
Individual Savings Accounts (ISAs) are tax efficient savings accounts that invest in stocks and shares or cash.
Introduced by the Government in 1999 as a replacement for Personal Equity Plans (PEPs), the rules were revised and the subscription levels increased with effect from 6 April 2008.
Adults have an annual overall investment allowance of £7,200, all of which can be invested in a stocks and shares ISA. Alternatively the investment can be split, with up to £3,600 of this amount being invested in a cash ISA and the remainder being invested in a stocks and shares ISA, either with the same or a different provider.
Following the 2008 change in regulations, money held in previous tax years’ cash ISAs can be transferred to stocks and shares ISAs with no impact on the current year’s allowance. Money saved in the current tax year in cash ISAs can be transferred to stocks and shares ISAs within the same tax year.
Existing PEPs (those opened prior to 5 April 1999) automatically became stocks and shares ISAs on 6 April 2008 and are subject to those regulations.
A stocks and shares ISA can include:
- Individual shares or bonds
- Pooled investments such as unit trusts, open ended investment companies (OEICs), life assurance investments or investment trusts
