You can invest an amount in an ISA every year. The amount invested does not attract tax relief but the income and gains on the investment are tax free, so any taxpayer will benefit from the tax shelter on the income arising. Tax credits on dividend income cannot be recovered.
The limits for ISA investments are changing. In 2009/10 the limits are £10,200 in total (with up to £5,100 in a cash ISA) if you are aged 50 or over in the tax year. The increased limit took effect on 6 October. For other savers the limit remains £7,200 (up to £3,600 in cash) until 2010/11, when the increased limits take effect for all savers.
Tags: cash isa, ISA investments, tax planning
