ISA stands for Individual Savings Account, it is a ‘tax efficient’ account, or a ‘tax wrapper’ for a savings or investments account, which means you don’t pay any tax on any returns or interest earned by money held in an ISA.
There are four kinds of ISAs (see ‘how many ISAs can I have’ below for more on this), but Chip is offering access to a Stocks and Shares ISA, which means you wont need to pay tax on the returns you earn with your funds.
You can only put a limited amount of money into an ISA every tax year, this is known as your annual ISA allowance.
You can read more about ISAs on the official government website: gov.uk/individual-savings-accounts
All UK residents over the age of 18 (or 16 for cash ISAs only) have an annual £20,000 ISA allowance (for the 2020/21 tax year, ending 5 April 2021). Any unused allowance doesn't roll over into the following tax year.
So if for example you don’t use your full £20,000 this year (2020/21), and only put in £15,000, you can’t carry the remaining £5,000 over to the next tax year and invest £25,000 into an ISA in 2021/22.
The main benefit of an ISA is that the returns are tax exempt, in essence you don't pay income tax or capital gains tax (CGT) on gains made within an ISA.
If you complete a tax return, you do not need to declare any interest, income or capital gains from money in an ISA.
There's no specific limit for how many ISAs you can hold overall - but you can only pay into one type of each ISA in each tax year and your £20,000 allowance covers all of them.
There are four types of ISAs:
Every tax year you can put money into one of each kind of ISA. The tax year runs from 6 April to 5 April.
You can save up to £20,000 in one type of account or split the allowance across the other types. But you can only move money into one of each type per tax year.
Yes it is. Chip are actually one of the few providers to currently offer a flexible Stocks and Shares ISA. This means that you have the freedom to withdraw money from your Chip ISA, and then pay it back in at a later date (within the same tax year), without it counting against your annual £20,000 ISA allowance.
We are not currently offering ISA transfers into Chip.
If you’d like to transfer your Chip ISA to another ISA provider, you will need to contact your new ISA provider to initiate the transfer process. The new provider will send you their ‘transfer in’ form and give you all the details on how to proceed.
All ISA transfers are handled digitally by our ISA manager, Seccl (read more about them in our legal details guide). Your new provider can initiate the transfer by contacting Seccl via email at email@example.com, or electronically through their ISA transfer solution provider. Seccl can also be found at 20 Manvers St, Bath, BA1 1JW.
Please be aware that we are currently unable to accept posted transfer forms.
Feel free to contact us with any further ISA transfer questions via email at firstname.lastname@example.org
You can have both an ISA and GIA through Chip.
For example, if you open an ISA and fill it up with your full £20,000 allowance, you can then also open a GIA if you want to invest more for the rest of the tax year.
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