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What is a stocks and shares ISA?

Watch our video for a quick explanation on what a stocks and shares ISA is and what you can invest in.

Video transcript - what is a stocks and shares ISA?

So, what is a stocks and shares ISA? A stocks and shares ISA is a flexible, tax efficient account for your investments that comes with a range of tax benefits. Returns are exempt from capital gains tax, there is no tax on any income you receive and you don’t need to declare them on your tax return.

Unlike a cash ISA, a stocks and shares ISA enables you to save your yearly allowance in either cash or stocks and shares, or any combination of the two. With a stocks and shares ISA, you can invest your money across a whole range of investment funds such as unit trusts, open ended investment companies and corporate and government bonds.

The great thing about stocks and shares ISAs is the flexibility they offer. They allow you to hold your money in cash if you are concerned about the market’s prospects or investments when you believe they have more potential and you can move easily between the two.

The current ISA allowance for this tax year is £20,000. Do remember that investments always have risks attached and the value of your stocks and shares ISA can go down as well as up, so you may not get back what you invest.

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