How much can I put in an ISA?

£20,000 per tax year across all ISA types. The Lifetime ISA has a separate £4,000 limit within this.

Can I have multiple ISAs?

Yes, but only one of each type per tax year. You can have Cash and Stocks & Shares ISAs with different providers.

What happens to my ISA when I die?

ISAs can be inherited by a spouse/civil partner tax-free through an Additional Permitted Subscription (APS).

Investment2026/27

What is ISA (Individual Savings Account)? UK Definition 2026/27

Written by Waqas Sagar ACA, FCCA, FMAAT

•

Verified by ICAEW, ACCA & AAT

•Updated April 2026

Quick Answer

A tax-free savings and investment account with a £20,000 annual allowance.

Definition of ISA (Individual Savings Account)

An Individual Savings Account (ISA) is a tax-efficient wrapper for savings and investments. Interest, dividends, and capital gains within an ISA are completely tax-free. The annual allowance is £20,000 across all ISA types.

Types include Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs (for first home or retirement), and Innovative Finance ISAs. You can split your allowance between types.

ISA (Individual Savings Account) — Key Facts for 2026/27

Annual allowance	£20,000
Lifetime ISA limit	£4,000 (within £20,000)
Tax on gains	None
Tax on dividends	None

How ISA (Individual Savings Account) Works — Example

ISA tax savings

1Invest £20,000 in Stocks & Shares ISA
2After 10 years, worth £50,000
3Gain: £30,000
4Outside ISA (higher rate): £30,000 × 20% = £6,000 CGT
5Inside ISA: £0 tax
6Tax saved: £6,000

How ISA (Individual Savings Account) Affects Your Tax

ISAs are one of the most valuable tax shelters available. Use your allowance annually - unused allowance cannot be carried forward.

Official HMRC Guidance on ISA (Individual Savings Account)

For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.

HMRC: ISAs

Frequently Asked Questions about ISA (Individual Savings Account)

Related Tax Terms

Capital Gains Tax

Tax on profit when you sell or dispose of an asset that has increased in value.

Dividend Allowance

The amount of dividend income you can receive tax-free each year - £500 for 2026/27.

Accuracy Note

This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.