Stocks and Shares ISAs

Individual Savings Accounts (ISAs) enable you to invest in a tax-efficient wrapper, with all capital growth free of capital gains tax, no higher-rate tax to pay on dividend income, and no need to include these accounts on your annual tax return.

The accounts are governed by HMRC regulations, which place some restrictions on the range of investments in which you can invest and in the case of Stocks and Shares ISAs, the amount you can subscribe to the account each tax year. You aren’t tied in to how long you keep the investment and can withdraw cash or investments at any time – however once money is withdrawn you can only replace it if your within the annual contribution limit.

By making ISAs a part of your investment portfolio, you can enhance its overall tax efficiency. These accounts can work well as longer-term saving vehicles alongside your pension arrangements. They give you taxation benefits with the flexibility of being able to withdraw funds should you need to, or to create a tax-efficient reserve for a rainy day.

A Stocks and Shares ISA is ideal if you are the type of investor who wants tax-efficiency with the ability to exercise control over when, where and how your money is invested. In this tax year, 2011/12, you can invest up to £10,680 in a range of qualifying investments.

Within a Stocks and Shares ISA with SimplyStockbroking you can invest in:

  • UK equities
  • Investment trusts
  • ETFs / ETCs
  • Gilts
  • Corporate Bonds
  • PIBS

Stocks and Shares ISAs allow you to take higher risks. Stock market investments can fall in value as well as rise, so you could get back less than you invest. However over the longer term funds and shares have the potential to produce significantly higher returns.