What is a stocks and shares ISA?

A stocks and shares ISA is a tax-efficient ‘wrapper’ that holds your investment. Once wrapped in the ISA, the investment suffers no capital gains tax or income tax liabilities, whether the investments earn interest or dividends. 

Where can I invest?

This type of wrapper allows you to put money in a range of different investments, including unit trusts, open-ended investment companies (OEICs), investment trusts, government bonds (gilts) and corporate bonds.

As with a cash ISA, you can choose to deposit your entire £20,000 annual allowance into stocks and shares ISA, or distribute it across ISA ‘wrappers’. While a stocks and shares ISA can offer higher returns than a cash ISA, you must be prepared to take the risk that the value of your investments, and the income derived from them, can go down in value as well as up.

Stocks and shares ISAs offer flexible investment options and valuable tax benefits, although they do come with some risk. Speak to an independent financial adviser to learn more about stocks and shares ISAs and find out if one could be right for you.

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