This tax year up to £20,000 can be invested in an ISA (a tax year runs from 6 April one year to 5 April the next).
The ISA allowance can be split as desired between a Cash ISA, a Stocks & Shares ISA, a Lifetime ISA (maximum £4,000) and an Innovative Finance ISA.
The Tax Benefits of ISAs
On most savings and investments tax is paid, but not if they are held in an ISA. An ISA is simply a wrapper within which capital and income is sheltered from tax, and less tax means the potential for higher returns.
Each tax year there is an ISA allowance, this year (2017/18) the allowance is £20,000. Used every year, the ISA allowance allows investors to build a substantial portfolio of tax-efficient savings and investments.
Investors can have one Stocks & Shares ISA, one Cash ISA, one Lifetime ISA and one Innovative Finance ISA each tax year, and can split the £20,000 allowance as desired between them (subject to a maximum of £4,000 in a Lifetime ISA), as long as they stay within the overall limit.