ISA limits and tax years
Each year the Government allows you to invest in a tax-efficient product called an ISA (an Individual Savings Account). The tax year runs from 6th April to 5th April each year - on 6th April you will be allocated the new tax year's ISA allowance.
The ISA limit for the current tax year is £20,000.
Splitting your ISA allowance
You can choose to invest your full allowance into a Stocks and Shares ISA (which includes the Investment ISA), a Cash ISA, or an Innovative Finance ISA, or any combination of the three.
Alternatively you can invest up to £4,000 in a Lifetime ISA and the remaining allowance between any combination of the other three types of ISA, as long as you don’t exceed £20,000 in total across your ISAs.
For example, if you invest £10,000 into your Stocks and Shares ISA (or Investment ISA for ready-made investments), you must save no more than £4,000 in your Lifetime ISA and £6,000 within a Cash ISA and/or an Innovative Finance ISA.
ISA declarations
A declaration is required by HMRC to make sure that when you apply for an ISA you understand the ISA rules. This is also required if you haven’t paid any money into your ISA in the previous tax year.
Do I need to open an ISA every year?
If you already have an ISA, you do not need to open a new account. To use your ISA in the new tax year, you can simply add money to your existing account. You can only subscribe into one Stocks and Shares ISA or Investment ISA for the tax year.
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