Stocks and Shares ISA rules, plainly
An ISA is a tax wrapper: money you invest inside one grows free of UK tax on the gains, dividends and interest. Here's the plain-English version of the rules - the yearly allowance, what you can and can't hold, and the two taxes that don't disappear. General information only, and the numbers below are for the 2025/26 tax year.
How much can go in?
You can put up to £20,000 in per tax year (6 April to 5 April), spread across all your ISA types combined - not £20,000 each. A Lifetime ISA sits inside that with a £4,000 sub-limit (plus a 25% government bonus); a Junior ISA has its own separate £9,000 allowance. Allowances can change between tax years - gov.uk always has the current figures.
What can go in a Stocks and Shares ISA?
- Shares - Individual company shares listed on a recognised stock exchange - UK names on the London Stock Exchange, US names like Apple, and many more. AIM-listed shares count too.
- Funds and ETFs - Unit trusts, OEICs, index funds and exchange-traded funds (ETFs) - the usual way beginners get instant diversification in one purchase.
- Investment trusts - London-listed closed-end funds (like a share that holds a basket of other things).
- Bonds and gilts - Corporate bonds and UK government bonds (gilts), or funds that hold them.
- Cash - You can hold money as cash inside a Stocks and Shares ISA between investments.
What can't go in one?
- Cryptocurrency - You can't hold Bitcoin or other crypto directly in an ISA, and US spot-Bitcoin ETFs (like IBIT) aren't available to UK retail investors inside one.
- Unlisted shares - Shares not listed on a recognised exchange - for example a private company or a friend's business - generally can't go in a Stocks and Shares ISA.
- Physical assets - Property, gold bars, art or collectibles held directly. (A gold ETF or fund is fine - it's the physical thing you can't hold.)
- Spread bets and CFDs - Leveraged trading products aren't ISA-eligible - and they're a different, much higher-risk activity from owning shares and funds.
Two taxes that don't disappear
An ISA shields you from UK tax - but not everything. Dividends from US shares still have 15% US withholding tax deducted at source (a W-8BEN form keeps it at 15% rather than 30%), and buying most UK shares still triggers 0.5% stamp duty, even inside the ISA. ETFs and AIM shares are exempt from that stamp duty.
ISA questions, answered
How much can I put in an ISA?
For the 2025/26 tax year the total allowance is £20,000, spread across all your ISA types (cash, stocks and shares, and so on). A Lifetime ISA has its own £4,000 sub-limit inside that £20,000; a Junior ISA has a separate £9,000 allowance. Figures can change between tax years, so check gov.uk for the current numbers.
Can I hold Bitcoin or a Bitcoin ETF in a Stocks and Shares ISA?
No. Cryptocurrency can't be held directly in an ISA, and the US spot-Bitcoin ETFs people often ask about aren't available to UK retail investors inside one. This is a common surprise.
Do I still pay any tax inside an ISA?
Inside an ISA there's no UK tax on your gains, dividends or interest. But two costs don't vanish: dividends from US shares still have 15% US withholding tax taken at source, and buying most UK shares still triggers 0.5% stamp duty - even inside the ISA.
Cash ISA or Stocks and Shares ISA?
A cash ISA is a savings account - your money doesn't fall in value, but it can be out-paced by inflation over long periods. A stocks and shares ISA invests in shares and funds - it can grow more over the long run but can also fall. Which fits depends on your timeframe, not a rule.
Want to see the tax saving in pounds? Try the ISA tax calculator, or start with the plain-English basics. This is general information, not advice about your situation, and ISA rules can change - always check gov.uk or your provider for the latest.