ISA definition extended
An ISA account is free of all Income Tax and Capital Gains Tax. Eligible holdings include cash, national savings products, life insurance products, and stocks and shares. Account holders may make withdrawals at any time without the loss of tax relief.
On 1 July 2015 the list of investments that can be held in a tax-advantaged ISA was extended to include:
- securities (including retail bonds) and shares issued by housing associations and other co-operative societies or community benefit societies (registered societies – formerly known as industrial and provident societies);
- a broader range of securities issued by companies, including those admitted to trading on certain Small and Medium Size Enterprise (SME) market;
- shares in a wider range of investment trusts.
New regulations come into force from 1 November 2016 that adds to the list of investments that can be held in an ISA. From next month, qualifying debentures issued by companies and charities held in an innovative finance account can be held in an ISA. This includes crowdfunding offers held in an innovative finance account. The maximum amount that can be invested in an ISA in the current 2016-17 tax year is £15,240.