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Common ISA queries

When it comes to ISAs, we often find the most common queries people have are also the simplest to answer. Here you'll find some of the questions asked about ISA allowances, holding accounts, transferring and what happens to your ISA when you die.

Our helpdesks answered the phone in less than 16 seconds on average in 2015, so if you still have any questions about ISAs please do not hesitate to call us on 0117 900 9000, alternatively you can email us.

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How much can you put in an ISA?

The amount you can put in an ISA is limited to a fixed sum each tax year, known as your annual allowance.The annual allowance is £15,240 for the 2015/16 and 2016/17 tax years. You can invest your allowance in a Cash ISA, Stocks and Shares ISA or a combination of the two.

Find out more about sheltering your savings from tax

What is an ISA?

An ISA is an individual savings account in which people can shelter savings and investments from tax. In both a Cash ISA and Stocks & Shares ISA, there is no further tax to pay on the income you receive (including interest and dividends). Within a stocks & shares ISA there is no capital gains tax to pay. You don't have to fill out a tax return for any investments held within a stocks and shares ISA.

Tax rules can change and benefits depend on personal circumstances.

Find out more about ISAs

How many ISAs can I have?

You can have as many ISAs as you like. Many people open ISAs each tax year and end up with multiple accounts held as either cash, or investments or a mixture of the two. The important consideration is how many ISAs you open in a tax year.

How many ISAs can you open in a tax year?

You can only open one of each type of ISA in a tax year. So you could open a Cash ISA and a Stocks and Shares ISA each tax year.

Importantly, you cannot exceed the maximum ISA allowance (£15,240) between all your ISAs.

Use our ISA contributions calculator to see how much you can invest or save

What are the ISA transfer rules?

Some of the most important ISA transfer rules include:

  • You can transfer your ISAs between providers as often as you like.
  • You can transfer a Cash ISA into a Stocks and Shares ISA and vice versa.
  • You can only pay into one Cash and/or one Stocks and Shares ISA per tax year.
  • Do not withdraw any existing savings and investments from your previous ISAs to transfer. Withdrawing as opposed to transferring will result in a loss of the tax-free advantages of your ISA wrapper.

Before transferring, check you will not lose any benefits or incur excessive exit fees.

Find out more about transferring to a stocks and shares ISA

Can a cash ISA be transferred to a stocks and shares ISA?

You can transfer a Cash ISA to a Stocks and Shares ISA or vice versa. You can also transfer an existing Cash or Stocks and Shares ISA to other providers (for example a Cash ISA to another Cash ISA provider) from previous tax years without losing the ISA tax benefits or affecting your annual contributions. Unlike Cash ISAs, investments will fall as well as rise in value so you could get back less than you invest.

Find out more about transferring

Can I transfer shares into an ISA?

Current rules mean you cannot normally transfer shares directly, they need to be sold and then bought back again within your Stocks and Shares ISA.

This process of transferring existing share holdings, whether certificated or held within a nominee account, into a Stocks and Shares ISA, is known as a Bed & ISA.

The Bed & ISA process is not as complex as it immediately sounds, most investment ISA providers allow for a Bed & ISA to be completed online, by post or over the phone.

Find out more about Bed and ISA

What are the ISA rules on death?

Changes to ISA rules that came into effect on 6 April 2015 mean that the ISA tax benefits can now be passed onto spouses at death.

On death of a spouse, the surviving spouse will receive an additional one-off allowance equal to the sum of the value of any existing ISAs on death. This is called the Additional Permitted Subscription (APS).

A worked example of the new ISA death benefits

  1. An investor holds £50,000 of ISA savings and investments and dies on 1 March 2016.
  2. From the date of death to the distribution of the value at probate, the ISA tax wrapper is lost and the £50,000 becomes subject to income tax on any interest or dividend income generated or capital gains tax where gains are made.
  3. Following probate, the value passes to the surviving spouse.
  4. On 6 April 2015, at the start of the new tax year, the spouse has a one off opportunity to shelter £50,000 into an ISA in their name in addition to their own £15,240 ISA allowance, giving a combined allowance of £65,240. This could be subscribed to a new ISA or an existing ISA.

Tax rules can change and the value of any tax benefits will depend on individual circumstances.

More about the Vantage Stocks & Shares ISA

Open a Stocks & Shares ISA online in minutes

Open your ISA today from as little as £25 a month or with a lump sum of £100 or more. If you're unsure where to invest in your Stocks & Shares ISA, you can open it today, hold your money as cash in your Stocks & Shares ISA and then choose your investments later.

Open a Stocks & Shares ISA