Stocks and Shares ISA
What is a Stocks and Shares ISA?
A Stocks and Shares ISA is an investment account where you pay no tax on your gains. Any profit you make, any dividends (payments companies make to shareholders) you receive. All tax-free. It’s the most common way to invest in the UK.
What can you hold in one?
Most investments: funds (bundles that hold many investments), ETFs, individual shares, bonds, and investment trusts. What’s available depends on your platform (the company that holds your investments).
How much can you put in?
Up to £20,000 per tax year across all your ISAs combined. This is your ISA allowance. You could put the full £20,000 in a Stocks and Shares ISA, or split it with a Cash ISA or LISA.
The £20,000 is how much you can pay in each year. Not how much you can hold. If you’ve been investing for years, your balance can be much higher.
What tax do you avoid?
Two taxes that would otherwise apply:
- No Capital Gains Tax. Keep all your profits when you sell
- No Dividend Tax. Keep all dividends you receive
Outside an ISA, you’d pay tax on gains above £3,000 and dividends above £500 per year.
Stocks and Shares ISA vs Cash ISA
A Cash ISA holds savings and pays interest. A Stocks and Shares ISA holds investments that can go up or down.
Cash ISAs are for money you might need soon. Stocks and Shares ISAs are for money you can leave for years.
Can you withdraw?
Yes, anytime. But if you withdraw and want to put money back in the same tax year, it counts against your £20,000 allowance again. Unless you have a flexible ISA.
Scrimpr’s ISA comparison covers more platforms than any other UK guide.
Compare ISA Platforms →Key points about Stocks and Shares ISAs
- Tax-free investing. No Capital Gains Tax, no Dividend Tax
- £20,000 annual limit, shared across all ISA types
- For long-term goals. Money you won’t need for years
- Withdraw anytime, but investments can be down when you need to sell
More information
Scrimpr links to official sources so you can verify what you’ve learned.