ISA
An Individual Savings Account — a tax-free savings or investment wrapper that lets you earn interest, dividends, and capital gains without paying UK tax on them. The annual ISA allowance is £20,000, which can be split across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs. Unlike pensions, ISA withdrawals are also entirely tax-free.
Related Terms
Tax-Free Savings
Savings held in tax-advantaged wrappers such as ISAs, where interest, dividends, and capital gains accumulate without being subject to UK tax.
Dividend Allowance
The amount of dividend income you can receive each tax year completely free of tax, currently set at £500.
Capital Gains Tax
A tax on the profit (gain) you make when you sell or dispose of an asset that has increased in value, such as shares, investment property, or business assets.