A guide to ISA’s changes for 2017-2018

Small Business Advice

May 26,2017

◴ 2 min

How have ISA’s changed for 2017/2018?

Allowances on all ISA’s (Individual Savings Account) has increased. The new amount allows you to invest from £15,2490 to £20,000 from April 2017.

When should you invest?

It is best to invest your money into an ISA at the beginning or as close to the start of the new tax year i.e. April 2017.

Which ISA should I invest in?

Both types of ISA’s provide a good investment. You can invest all £20,00 into a Cash ISA or into a Shares ISA. You also have the option of dividing this amount between both types of ISA’s.

Is all the interest from a ISA tax free?

All interest and savings are tax-free for cash ISA’s. All dividends and capital gains earned from Share ISA’s are also tax-free.

How to invest into a Share ISA?

Share ISA’s have some risk and accessing your money may come with some new banking options. Consider these factors when deciding how to invest into a Share ISA.

Where to get the best advice on ISA’s?

To get expert advice you should seek advice from an accountant. Pearl Accountants dedicated tax experts are available to discuss your options.

Schedule a meeting for a free consultation.

Jahan Aslam

With 20+ years of experience, supporting businesses at every stage of their journey, they offer practical advice on UK accounting, taxation, company formation, and financial planning, helping entrepreneurs build and grow successful businesses.

Frequently Asked Questions

What is the ISA allowance for the 2017/2018 tax year?

For the 2017/2018 tax year, the annual ISA allowance increased to £20,000, allowing individuals to save or invest up to this amount in ISAs while benefiting from tax-free returns.

When is the best time to invest in an ISA?

The best time to invest in an ISA is at the beginning of the tax year, as this gives your savings or investments more time to benefit from tax-free growth throughout the year.

Can I split my ISA allowance between different types of ISAs?

Yes. You can invest your annual ISA allowance entirely in a Cash ISA, entirely in a Stocks and Shares ISA, or divide it between eligible ISA types, provided you do not exceed the annual allowance.

Is the money earned from an ISA tax-free?

Yes. Interest earned in a Cash ISA is generally tax-free, while dividends and capital gains from a Stocks and Shares ISA are also exempt from UK tax, subject to the ISA rules in force for that tax year.

Should I choose a Cash ISA or a Stocks and Shares ISA?

The right ISA depends on your financial goals and risk tolerance. A Cash ISA offers greater security for savings, while a Stocks and Shares ISA provides the potential for higher long-term returns but carries investment risk. Professional financial advice can help you choose the most suitable option.

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