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 2026/27 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 2026/27 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.
How many ISAs can I have?
You can hold as many ISAs as you like, and since April 2024 you can pay into more than one of the same type in a single tax year. The catch is the shared £20,000 limit: it is spread across all of them combined, not £20,000 into each. Junior ISAs have their own separate allowance.
Does transferring an ISA use up my allowance?
No. Moving money already in an ISA from one provider to another is a transfer, not a new contribution, so it does not touch this year's £20,000 allowance. Use the provider's official ISA transfer process rather than withdrawing the cash yourself, which would lose the tax wrapper.
What happens to my ISA when I die?
An ISA is not exempt from inheritance tax: its value counts as part of your estate. A surviving spouse or civil partner, though, gets a one-off extra allowance (an Additional Permitted Subscription) equal to the ISA's value, so they can shelter that amount on top of their own limit. gov.uk has the detail.
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.