Stocks & Shares ISA
A tax-free investment wrapper for UK adults. All income and capital gains earned inside are free of UK tax, making it the core investment vehicle for most people.
How It Works
You open a Stocks & Shares ISA with a platform or broker and invest up to £20,000 per tax year in shares, funds, ETFs, and bonds. All dividends, interest, and capital gains are completely tax-free. You can sell and withdraw at any time.
Tax Treatment
All income and capital gains within the ISA are free of UK income tax and capital gains tax. No need to report on your tax return.
Tax Advantages
- Capital gains are completely free of CGT
- Dividends received tax-free — saves 8.75% to 39.35%
- Interest from bonds held within the ISA is tax-free
- No reporting requirements on Self Assessment
Who Is This Suitable For?
Anyone investing for the medium to long term who wants to shelter returns from tax. Essential for company owners who have extracted dividends.
Frequently Asked Questions
Should I use a Stocks & Shares ISA or a pension first?▾
Generally maximise pension contributions first for the tax relief, then use your ISA allowance. However, ISAs offer more flexibility as you can access money at any time.
What happens if my investments lose value?▾
You cannot claim tax relief on losses within an ISA. However, you also do not need to pay tax on any gains.
Can I hold overseas shares in a Stocks & Shares ISA?▾
Yes, most platforms allow overseas shares. However, foreign dividends may be subject to withholding tax in the country of origin.