17:00 11 March 2013
Individual Savings Account or ISA is a financial product introduced in the United Kingdom to encourage more people to save for the future. Savers contribute money from after tax income. Earnings are not subjected to capital gains tax or income tax within a holding or upon withdrawal.
Below are ISA frequently asked questions:
Where can I get ISA?
You can get ISAs from banks, National Savings and Investments, building societies, insurance companies, some supermarkets and retailers, unit and investment trust companies, stockbrokers, and financial advisers. An ISA manager will look after your account for you.
Who is eligible?
In order for you to open a cash ISA, you must be at least 16 years old or 18 above if you want stocks and shares ISA. You must be a UK resident. You cannot hold an ISA jointly with anyone else.
Are there limits?
Yes. For 2012 to 2013 tax year, you are allowed to put up to £11,280 into ISAs. The maximum you can put into cash ISA is £5,640 and the rest can be placed into a stocks and shares ISA. You also have the option of putting all your money into stocks and shares ISA.
What are the tax benefits?
The money you earn from your ISA savings and investments are tax-free. This includes interest, bonuses, and dividends. There is no need to declare your capital gains from your ISAs to the tax office.
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