Tax years and ISA limits
ISAs, or Individual Savings Accounts, are tax-efficient products where you can save or invest up a specific limit in each tax year. The tax year runs from 6th April to 5th April each year – the ISA limit for the current tax year is £20,000.
Splitting your ISA allowance
You can invest your full allowance into a Share Dealing ISA (which includes our Investment ISA), a Cash ISA, or an Innovative Finance ISA, or you can split your allowance between any combination of the three.
You can also choose to invest up to £4,000 in a Lifetime ISA and then you use 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 £12,000 into your Share Dealing ISA (or Investment ISA for ready-made investments), you must save no more than £4,000 in your Lifetime ISA and £4,000 within a cash ISA and/or an innovative finance ISA.
ISA declarations
When you apply for an ISA, HMRC require that a declaration is made to ensure 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?
No, 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 Share Dealing ISA or Investment ISA for the tax year.
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