These rules allow people to invest in markets via a stocks and shares ISA, to save in cash via a cash ISA, to put money away for later in life or for a first-time property purchase via a Lifetime ISA (LISA), to put money aside for a child under 18 via a Junior ISA (JISA), or to invest by peer-to-peer lending in an Innovative Finance ISA.
At Nutmeg, we offer a stocks and shares ISA, stocks and shares Lifetime ISA and a stocks and shares Junior ISA.
The rules are subject to change - and change they do - so it’s a good idea to keep abreast of the latest guidance and limitations to ensure you’re getting the most out of your annual tax-free ISA allowance - and, conversely, that you’re not breaking any ISA rules and exposing your investments to unnecessary taxes.
It means you can only open one of each type of ISA within a tax year and you can only pay in a total of £20,000 into all your ISAs within a tax year (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.
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 email@example.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 Nutmeg you can start a stocks and shares ISA from as little as a £500.
As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. A stocks and shares ISA may not be right for everyone and tax rules may change in the future. If you are unsure if an ISA is the right choice for you, please seek financial advice.
A stocks and shares Lifetime ISA may not be right for everyone and tax rules may change in the future. You must be 18–39 years old to open one. If you need to withdraw the money before you’re 60, and it’s not for the purchase of a first home up to £450,000, or a terminal illness, you’ll pay a 25% government penalty. So, you may get back less than you put in. Compared to a pension, the Lifetime ISA is treated differently for tax purposes. You may be better off contributing to a pension. If you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions. If you are unsure if a Lifetime ISA is the right choice for you, please seek financial advice.
The value of your Junior ISA can go down as well as up and you may get back less than you invest. To open a Nutmeg JISA, your child must be under the age of 16 and funds cannot be withdrawn until your child turns 18. Tax treatment depends on your individual circumstances and may be subject to change in the future. If you are unsure if a Junior ISA is the right choice for you and your child, please seek financial advice.
Our team of specialists can help answer any questions you may have.