What is an Individual Savings Account (ISA)?
An ISA is a type of savings account. Basically, if you save in an ISA you are entitled to keep all that you receive from that investment and not pay any tax on it. This is not the case with, for example, an ordinary bank or building society account unless you are a non-taxpayer. See the HMRC’s booklet IR111 ‘Bank and Building society interest. Are you paying tax when you don’t need to?’ (PDF 564K) and A Guide for Savers for more information on bank and building society accounts. ISAs began on 6 April 1999 and will be around until at least 6 April 2009. You can start with small amounts and save up to £7,000 each tax year until 2005-06 and up to £5,000 in each tax year from 2006-07. The reduction from £7,000 to £5,000 after 5 April 2006 is subject to consultation. A tax year runs from 6 April to 5 April in the following year. You can put money in and take it out whenever you want and you do not even have to tell your HMRC office that you have an ISA. The ISA scheme provides different way
