Isa rules

By THIS IS MONEY
Updated:

 

Can I invest £3,000 in my tax-free mini Isa for tax year 2002-03 and also invest a further £2,000 in a guaranteed 5-year equity bond during this same tax year? SW, Welwyn.

Darius McDermot, independent financial adviser at Director Chelsea Financial Services says: In short, yes. The two products are totally separate from one another.

Any gain on an Isa is free of capital gains tax and income taken from

An Isa is free of income tax, so the amount each person can invest is limited. You are allowed to invest up to £7,000 in an Isa in any one tax

year.

Isas are a tax free investment with an investment limit whereas bonds are subject to income tax at your marginal rate but there is no investment limit. Investment in an Isa does not affect your ability to invest in other investment vehicles in the same tax year.

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