Individual Savings Accounts (ISA)
ISAs were introduced on the 6th April 1999 as a replacement for personal equity plans. An ISA is not an investment itself but a tax efficient wrapper that can be placed around a wide range of savings and investment products.
An investor can now subscribe to two types of ISA. These are:
- Cash ISAs and
- Stocks & Shares ISAs
Each tax year an investor has an allowance where up to a maximum amount can be invested in a cash ISA with one provider and the balance can be invested in a stocks and shares ISA with either the same or a different provider.
Investors do not pay income tax on any interest or any additional income tax on dividends they receive from the investments held in an ISA, nor Capital Gains Tax on any gains made on disposal of the ISA.
In November 2011 this investment was introduced as a replacement for Child Tax Funds as a product for the under 18s. There is an initial subscription limit each tax year but the child cannot access the fund until 18.
An independent adviser, such as Ethical Investors, can help you find an ethical investment that matches both your ethical views and meets your risk profile.