ISAs

ISA rules

What are the rules that apply to all ISAs?

  • You can open and pay in to multiple forms of adult ISA per year, but it's worth checking individual providers' rules first.
  • Your tax-free allowance for adult ISAs is £20,000 for the 2024/25 tax year. 
  • You do not pay tax on the interest on cash in an ISA or on the income or capital gains from investments in an ISA.

What does this mean? 

It means you can open and pay in to multiple of each type of ISA within a tax year, as long as you don't exceed the £20,000 annual allowance (see below for JISA rules). You do not need to declare any ISA interest, income or capital gains on a tax return.

For example: In the same tax year, you could open and contribute £4,000 into a LISA, open a new stocks and shares ISA and put £6,000 into that and then also put £10,000 into a pre-existing cash ISA.

What are the rules that apply to ISA transfers?

  • ISAs can be transferred between providers (John Lewis Investments provides an easy to use and transparent service for this).
  • You can also transfer between different types of ISA.
  • If you are transferring money that has been put into another ISA this tax year, you must transfer all of it.
  • If money is from previous tax years you can choose to transfer it in part or completely.
  • Transferring ISAs does not use any of your current year’s ISA allowance.

What are the stocks and shares ISA rules?

  • You can open and pay in to as many as you like each tax year.
  • The maximum you can put in is £20,000 a year (your whole ISA allowance).
  • The assets held in a stocks and shares ISA can include shares, funds, corporate bonds and government bonds such as US treasuries and UK gilts.
  • You can transfer up to £200,000 of employee shares into a stocks and shares ISA if you have shares in a Save As You Earn Scheme or Share Incentive Plan, if your ISA provider agrees to the transfer.

What are the rules that apply to Junior ISAs?

  • The JISA and the money in it belongs to the child in whose name it was set up.
  • You must be the parent or guardian of the child to set up a JISA.
  • It is possible for friends and family to contribute to a child’s Junior ISA (provided the Junior ISA provider allows this). 
  • The Junior ISA allowance for this tax year is £9,000.
  • Each child can only ever have one cash JISA and one stocks and shares JISA in their name.
  • The £9,000 JISA allowance can be split between a child’s stock and shares JISA and their cash JISA –the total amount paid into them each year cannot exceed this amount.
  • A child can have two JISAs at any one time (one stocks and shares ISA and one cash ISA).
  • Once the child turns 18, they can withdraw from the JISA that was set up in their name.
  • You can transfer money between a child’s JISAs.
  • You can transfer money from a child trust fund (CTF) to a JISA, but your child cannot hold both.
  • Only the ‘registered contact’ (the parent or guardian who set up the JISA) can manage the JISA, until the child is 16 when they can become the registered contact.
  • JISAs automatically become adult ISAs once the child turns 18.
  • If a child becomes terminally ill the registered contact can withdraw money from the child’s JISA account.

ISA rules are subject to change and the Government reviews them often. The above provides an overview of what you can hold in your ISA, which ISAs you can open and when and how much you can pay into them within a tax year. If you are still unsure you can check the government ISA website or contact our support team via johnlewisinvestments@nutmeg.com.

We hope this helps you make the most of ISAs; they can be a great way for an individual to start investing and with John Lewis Investments you can start a stocks and shares ISA from as little as a £500. 

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