• Top ISA queries answered

    To help make understanding your ISA options easier we’ve looked at some common questions we get asked.

    What’s an ISA?

    An ISA (Individual Savings Account) is a tax-efficient way to save via Cash ISA or invest into a Stocks and Shares ISA. Each tax year you get an annual ISA allowance, which is the maximum amount you can save or invest tax efficiently.

    What’s the yearly maximum I can put in an ISA?

    The ISA allowance for the 2016/17 tax year is £15,240, which will be increasing to £20,000 on 6 April 2017.

    In April 2016 new flexible ISA rules were introduced by the Government. These new rules now mean it is possible for you withdraw money from  your ISA and reinvest it back in the ISA as long as it’s within the same tax year, without it counting towards your annual ISA allowance.

    Am I eligible for an ISA?

    Only UK residents can open an ISA. You have to be aged 16 or over to open a Cash ISA and 18 or over to open a Stocks and Shares ISA. You’re unable open an ISA for someone else unless you have a registered power of attorney.

    What types of ISA are there?

    Types of ISA available:

    A Stocks and Shares ISA – offered through our Elevate Platform

    This ISA allows you to invest your money in anything from government and corporate bonds funds to individual shares or funds such as unit trusts or investment trusts.

    This is a tax efficient ISA, you won't pay Capital Gains Tax on any gains or further tax on any income which might be generated.

    A Cash ISA*

    This ISA is similar to a bank or building society savings account. However, any interest earned is free of tax. Several types of Cash ISAs are available ranging from ISAs where you can gain instant access to your money to fixed term and notice accounts.

    An Innovative Finance ISA*

    This was introduced in April 2016 to allow Peer-to-Peer lending to benefit from the tax efficiencies of ISAs.  Peer to peer lending cuts out the middle man, by allowing investors to lend all or some of their ISA allowance directly to borrowers - providing loans to individuals and to small businesses.

    However, the Innovative Finance ISA isn't currently protected by the Financial Services Compensation Scheme (FSCS). This means that you wouldn’t be able to claim under the FSCS if a borrower defaulted on their loan repayments to you. There's no guarantee that you'll receive all your money back.

    Is there a limit to how many ISAs I can have?

    You can have one Stocks and Shares ISA, one Cash ISA, and one Innovative Finance ISA per tax year. If you decide to open a Help to Buy ISA this will count as your Cash ISA for the time you're paying into it. However you can only ever have one Help to Buy ISA and this cannot be opened in the same tax year as a Cash ISA.

    Can I split my allowance?

    Your yearly ISA allowance of £15,240 can be split however you like between your three different ISAs depending on your preference.

    When does the tax year begin and end?

    The tax year runs from the 6 April through to 11:59pm on the 5 April the following year, this allows you a whole year to make the most of your tax efficient allowance.

    Tax benefits may change in the future. The value of your investments inside a Stocks and Shares ISA can go down as well as up. This means you could get back less than you invest. You should consider investing for at least 5 years.

    Please note that the value of investments can go down as well as up and are not guaranteed. You could get back less than you invest. AXA Wealth doesn’t currently offer a Cash ISA, Innovative Finance ISA or the Help to Buy ISA.

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