Share ISA

The 2008 budget significantly altered the way in which ISAs are structured. Now, ISAs are divided into Cash and Stocks and Shares ISAs. Some aspects of the Share ISA described below may therefore now be obsolete.

A share ISA is a way of protecting you from tax when you buy shares in any company listed on a recognised stock exchange or put money into a fund.

Your provider can choose the stocks you can choose your own in a 'self-select ISA' or go for an index-tracker fund, which follows a share index.

You cannot transfer shares you already own into an ISA - you have to sell them and then buy them back within the ISA. You will have to pay 0.5% stamp duty when you buy the shares back.

Choosing the best ISA for the share component of your maxi ISA or a share mini ISA is harder than comparing rates offered on cash and the tax benefits are complicated.

The clearest benefit is that you don't pay any capital gains tax on your investment when you sell shares held within an ISA. If you invest the full allowance on shares in a maxi ISA and do this over several years, you could find this offers you a substantial saving when you sell your shares.

For implications for income tax, see our Tax Guide.

You have to be 18 to open a share ISA.

ISAs are an excellent way to invest your money tax-free. For other ways to pay no tax on investments, see our section on www.Investments.co.uk/Investing_for Children/tax-free_savings plans

ISAs are an excellent way to invest your money tax-free. For other ways to pay no tax on investments, see our section on www.Investments.co.uk/Investing_for Children/tax-free_savings plans

 

UK Investments - Financial, Property & Other Investments - 1998-2008

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