An Individual Savings Account (ISA), allows you to invest up to the annual ISA allowance each tax year.

CURRENT TAX YEAR’S ALLOWANCE: £20,000

Different types of ISAs:

• Stocks and Shares Investment ISA
• Cash ISA – a cash ISA works like a traditional savings account. Providing you are a UK resident and over the age of 16, you can save into a Cash ISA and receive interest. If you hold money in a bank, outside of an ISA, and receive interest, you will have to pay Income Tax on earnings over £1,000
• Lifetime ISA – the Lifetime ISA was targeted to those looking to save for their first home and/or retirement. With this type of ISA, you’ll receive a 25% bonus on anything you put into it, up to a maximum of £1,000 per year. Please note that the Lifetime ISA comes with many other rules, so you should be aware of these before investing in one
• Innovative Finance ISA – an Innovative Finance ISA allows you to provide loans to approved individuals and businesses via an online peer-to-peer lending platform in return for a fixed amount of interest over a set period and paying no interest on the interest you earn. This type of ISA can expose you to more risk as your money is not protected by the Financial Services Compensation Scheme
• Junior ISA – find out more here

At Chelsea we offer Stocks and Shares Investment ISAs and Junior ISAs.

There are some rules that you should be aware of before opening a Stocks and Shares ISA.

• You must be 18 years or over
• You must be a UK resident. If you are not resident, either perform duties which, by virtue of Section 28 of Income Tax (Earnings and Pensions) Act 2003 (Crown employees serving overseas), are treated as being performed in the UK, or married to, or in a civil partnership with, a person who performs such duties.
• You must not exceed the allowance over the tax year.

• You can invest as a lump sum
• You can make regular savings throughout the tax year – helping to mitigate against market movements
• No income tax to pay on any profits you make
• No tax dividends
• Profits are free from capital gains tax – capital gain tax is the amount you pay on any profit you make when you come to sell an asset, for example a second home or investment fund
• Interest from corporate bonds is tax free (saving up to 45% tax)
• All income is paid without further tax liability (unlike income from pensions)
• ISA profits do not have to be declared on your tax return
• The flexible allowance allows you to withdraw money and add it back within the same tax year
• An Investment Stocks and Shares ISA can give you control of where your money is invested. For example, it could help you invest in ethical or sustainable funds (sometimes referred to as Environmental, Social and Governance – or ESG – funds) if that’s important to you.
• Enhanced death benefits.

• There is a limit of how much you can invest into ISAs, over a tax year
• You cannot hold a joint ISA
• You cannot carry forward unused allowances
• Charges on a Stocks and Shares Investment ISA tend to be higher than that of a Cash ISA.
• You will be invested in the stock market, so will be exposed to risk.
• The value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and the ISA and tax rules can change. Whilst we may draw attention to certain investment products, we cannot know which of them, if any, is best for your circumstances and must leave that judgement to you. If you are unsure about the suitability of any investment you should seek professional advice.

In the UK alone, there are over 3,000 different funds to choose from, so choosing the right one can feel daunting.

At Chelsea, we have collated a number of different options:

The award-winning VT Chelsea Managed Funds – The VT Chelsea Managed funds offer a complete investment solution. You can choose from one of the four managed funds, based on your requirements and attitudes to risk. Find out more here.

Build a Portfolio – If you are interested in building your own portfolio, why not head over to our Research Hub or read our Build a Portfolio guide. Alternatively, you can also use our Viewpoint or Fund Review to help you make an informed decision.

Once you know where you want to invest, there are a number of ways you can invest:

• Log in to your account and process your instructions yourself
• Call us on 020 7384 7300 and our helpful staff will assist you
• Complete an application form and forward it to us at:

Chelsea Financial Services, St James Hall, Moore Park Road, London, SW6 2JS

Before investing, you should ensure that you have read the key investor documents of the fund(s) you want to invest in to, the pre-sale illustration(s) and the relevant terms and conditions. More details can be found on our dedicated disclosures page.