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Maxi and Mini ISA

Posted on Apr 28, 2008 under TAX |

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Individual Savings Account (ISA) is a tax free savings account. This account enables people to save money for their future use and to fulfill their needs. The investments which are made in ISA are not taxable for income tax or capital gain tax. ISA was brought by the government in 1999. There are certain guidelines that are to be followed in order to open a ISA account like the individual should be 18 years or more in age. He/She should be the resident of the country where the account is opened. Joint accounts are not allowed in ISA as well as on behalf on other individuals.

Types of ISA

There are different types of ISAs known as Maxi ISA and Mini ISA. A person can only opt for one Maxi ISA or up to two Mini ISAs (one for each component). No one can invest in both ISA’s in the same year.

Maxi ISA: In a Maxi ISA the individual can invest his/her money in two different components Cash and Stocks & Shares. Stocks and Shares are essential in Maxi ISA whereas the cash and Insurance are optional. A max amount of £7,000 can be invested in Maxi in whichever way the individual likes between the two components.

Mini ISA: This is different from Maxi ISA, as the individual can only invest in one component each financial year. Also the amount which can be invested in this is fixed for each component. This provides greater flexibility to invest in Cash ISA like building society and Mini stocks and shares with specialized company. An individual can invest up to £4,000 in stocks and shares whereas up to £3,000 in cash.