ISA FAQ

Get answers to some of the most frequently asked questions about ISAs (Individual Savings Accounts) and Unit Trusts with our handy FAQ.

ISAs are an easy way to save in a tax-efficient way. Each tax year UK residents are entitled to an ISA allowance, which is the total they can invest in to an ISA during the tax year. There is no income tax or capital gains tax to be paid on the investment returns.  There are four main types of ISA:

  1. Cash ISA
  2. Innovative finance ISA
  3. Lifetime ISA
  4. Stocks and shares ISA.

The government sets the allowance limits for each tax year.

The ISA allowance for 2019/20 is £20,000.

You can use your allowance to invest in a cash ISA, a stocks and shares ISA , a lifetime ISA, an innovative finance ISA or any combination of the four.

However, please note that RLUM only offers a Stocks & Shares ISA.

Cash ISAs are savings accounts. You'll receive a rate of interest on your savings which we pay you 'gross', so your returns are tax-free.

The lifetime ISA, which was announced in the 2016 Budget, is a new type of Individual Savings Account. It's designed to help you save for a first home or for your retirement at the same time. RLUM Ltd does not offer lifetime ISAs. Note the following apply.

  1. You can open a lifetime ISA if you're aged 18 to 39
  2. You can save up to £4,000 tax-free in each year up to the age of 50
  3. The government will pay a 25% bonus on these contributions, up to £1,000 a year
  4. You can use some or all of the money to buy your first home, and/or you can keep it in the lifetime ISA to help fund your retirement. You can access it without charge from the age of 60

Stocks and Shares ISAs are a tax-efficient umbrella under which you can invest in our unit trusts. This means you have no further tax to pay on your investment returns. And unlike most investments you don't need to record your ISAs in your annual tax return.

The government introduced rules in 2015 allowing a surviving spouse or civil partner to benefit from an extra ISA allowance. The allowance is equal to the value of their partner's ISA at the time of their death.

Unit trusts are collective investments. This means we pool your money, along with other investors' monies into a fund, called a 'unit trust'. They are medium to long term investments. You should try to keep your money invested for five years or more.

Professional investment managers, supported by a team of experts, manage all our unit trusts. They're responsible for investing the money to achieve each fund's particular objectives.

Our range of funds are designed to meet your personal requirements whether you're new to investing or an expert.

It is likely there will be ups and downs along the way and past performance is not a reliable indicator of future results. Remember that unit trusts are stock market-based investments and their value can fall as well as rise. The capital invested is not guaranteed and you may get back less than you put in.