ISA limits

[Ames]

Hi,

I've just got mum's life insurance payout of 6.7k. I have an ISA which is empty, am I ok to put it all in that or will some of it be taxed? (I don't pay income tax).

If not I'll just spread it around my other three accounts. I want it out of my current account asap though.

[MrsD]

Re: ISA limits

I think the ISA limit in any one year is around £5.5. so if you used the ISA for that and popped the rest into another account? bear in mind if you have to take the money out your ISA for any reason, you can't put it in again in this tax year, even if you haven't saved up to the limit. Hope this makes sense, feel foul last year, so that is how I know.

[Ames]

Re: ISA limits

Thanks, ISA might not be the best place for it then as I'll need access to it for uni fees etc, which I'll then be saving up throughout the year for next year's bills.

[MrsD]

Re: ISA limits

OK to save up in, just as long as you don't take it out then put it back in!

[Ames]

Re: ISA limits

I would be taking out and putting in though, so I think I'll just put the main amount in another account, then use the ISA for saving up throughout the year.

[MrsD]

Re: ISA limits

good plan!!

[sandrajames]

The previous ISA system used to limit how much you could put into each pot – you'd get half your allowance in cash and half in shares [B], or you could choose to put it all in cash or all in shares.

In July 2015, however, the rules were almost completely relaxed. Although the amount you can save is limited – £20,000 from 6 April 2018 – through online trading you now get to choose whether you want to split this between stocks & sharesISAs, cash ISAs, innovative finance ISAs, Help to Buy ISAs and the new Lifetime ISA, and how you do so.

Yet do note, there's a limit to how much you can put in the last two. For example, you can only put £4,000 in the Lifetime ISA every year, which means you could put the remaining £16,000 into any of the other options.