ISAs 13/08/2010
Individual investment accounts (ISAs) enjoy the benefits of tax exempt interest and in the case of Equity ISAs are also capital gains tax exempt.
Although you would need independent advice for ISAs invested in the stock market (Equity ISAs) Cash ISAs are in effect tax free building society accounts. Many people hold their savings in ordinary bank or building society accounts without taking advantage of a Cash ISA. Ordinary savings accounts suffer tax at source of 20% with a further 20% or 30% charge if you are a higher rate tax payer. By utilizing the annual Cash ISA allowance up to £5,100 per person can be transferred into a tax free account. Instant access Cash ISAs are available as well as term accounts. Always keep an eye on the interest rates as these can fall. You can transfer a Cash ISA to another provider but withdrawals will take your savings out of the tax free zone.