First Isa Rate Sources of first isa rate resources from the Web

An ISA is a type of savings account. Basically, if you save in an ISA you are entitled to keep all that you receive from that investment and not pay any tax on it. This is not the case with, for example, an ordinary bank or building society account unless you are a non-taxpayer. See our booklet IR111 ‘Bank and Building society interest. Are you paying tax when you don’t need to?’ and for more information on taxback bank and building society accounts.

What can the cash component include? The cash component of an ISA can include:
-bank and building society accounts
-units or shares in UK authorised unit trusts and open-ended investment companies (OEICs) which are money market schemes (sometimes called ‘cash funds’) and fund of funds schemes which invest in them.
-National Savings and Investments products which are specially designed for ISAs (but not other National Savings and Investments products such as the Investment Account, Savings Certificates or Pensioners' Guaranteed Income Bonds
-certain shares and units that fail to meet the qualifying conditions for the stocks and shares component
-life insurance policies that fail to meet the qualifying conditions for the stocks and shares component. These will generally be policies that guarantee to return 95% of the money you initially invested within 5 years from the date you made the investment.

ISA cash, savings and investments must always remain in the same component. You cannot move funds from, say, a cash ISA with one manager to a stocks and shares ISA with another. A particular ISA may only allow certain types of savings or investments. For example, some collective investment scheme and life insurance products may fall into the cash ISA component so they can only be transferred into another cash ISA, but not all cash ISA providers sell insurance or investment products. If you are not sure what type of savings or investments you hold you should ask your ISA manager. If you want to include savings and investments that are not available for your ISA, you may have to transfer to another manager.

You pay no tax on capital gains arising on your ISA investments (losses on ISA investments cannot be allowed for Capital Gains Tax purposes against capital gains outside your ISA).

You can transfer all of the money you put into your ISA in earlier years or only some of it, if you wish. However, some managers may not allow you to transfer part of your ISA (this will be in the terms and conditions). Your existing ISA manager will be able to tell you how much you can transfer.