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FRIDAY Five: 5 Things to Know about ISAs

Each week in our Friday Five, we provide five quick tips about a different topic of interest. Interested in seeing a particular subject discussed? Send an email with your FAQ to

This does not constitute advice and advice should be sought in all instances before acting on it.

An ISA is a versatile, tax-efficient way to hold your investments. From bonds, equities, and property to multi-asset funds and even cash, they let you control where and how your money is invested.

Don’t confuse ISAs as an investment in their own right , they’re simply a way of sheltering your money from tax as you won’t need to declare any investments held in these accounts on your tax return. For self-employed doctors and dentists who need to file their annual tax return, anything that doesn’t need to be included is less work and a huge help.

Here are five things you should know about ISAs:

1. Allowance limits

For the 2018/19 tax year, the annual limit for contributions across all your ISA accounts (cash and stocks, shares, and lifetime) is £20,000 – the same as the 2017/18 tax year. The Junior ISA limit has actually increased from £4,128 to £4,260 this year and you can save up to £4,000/year in a lifetime ISA. For a help to buy ISA, you can save up to £1,200 per year.

2. ISAs for children

Up to 16 years old, every child is allowed one cash Junior ISA or one investment Junior ISA (one or the other, they cannot have both at the same time but you can transfer from one to the other).

Once they hit 16, minors are actually allowed to take on an “adult” ISA as well as their Junior one, which means they could save more than their parents for those two years.

3. Pass on your ISA

Your ISA can actually be passed on to your spouse or civil partner in the event of your death. To do so, your significant other is provided an extra ISA allowance called an “additional permitted subscription” equal to the balance on your ISA upon your death so it won’t count towards their individual limits.

4. Peer-to-peer isn’t just for file sharing

The Innovative Finance ISA is relatively new, it has only been introduced in the last few years. Peer-to-peer (P2P) lenders allow you to protect their specific P2P investments from HMRC. Rates associated with P2P are significantly higher than standard cash ISAs as you’re lending your money directly to those in need of a loan; they also carry more risk with them because they aren’t covered by the Financial Services Compensation scheme. This means you could lose your money if the company goes under, but P2P lenders do need to be authorised by the Financial Conduct Authority.

5. Flexible withdrawals

The rules surrounding ISA withdrawals have relaxed in recent years. Gone are the days when there was a hard and fast limit on deposits and withdrawals – if you took any money out you couldn’t repay that money back even if you technically hadn’t met your limit. Now, you can withdraw cash if you need it and put back the amount you borrowed until you reach your allowance.

If you have any more questions about ISAs or other ways to save money tax free, we’re happy to help so contact us to speak to one of our experts.

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