I'm not a Brit – can I open an Isa?

By THIS IS MONEY
Updated: 05:37 EST, 9 March 2010

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I am not British but I have lived in England for several years and pay tax on my UK earnings. Will I be allowed to put money into a tax-free cash Isa? I.F., Blackburn, Lancashire

Cash Isas: Take advantage of your allowance

Simon Moon from This is Money replies: Savers who wish to avoid tax by putting savings into a cash or stock-and-shares Isa do not have to be British citizens.

One of the chief requirements is that you are 'resident and ordinarily resident in the UK for tax purposes'.

This confusing piece of HM Revenue & Customs jargon means you are living here at the moment and this is where you normally live.

It is possible for a person to be 'resident but not ordinarily resident'. This applies where an individual is living in the UK for a particular tax year, but normally lives somewhere else.

If you cease to be a UK resident while you have an Isa open, you are not allowed to put money into it. However, you will still be entitled to the tax benefits and when you return - and become ordinarily resident once more - you can start putting money into Isas again.

Questions of residence should not be confused with domicile, from which we get the term non-dom, and which can be something of a tax nightmare.

You can find out more about this on the HMRC website or by speaking to Lord Ashcroft if you happen to be a friend.

One other requirement for taking out a cash Isa is that you must be at least 16 years old (18 for a stocks and shares Isa).

Savers born before 6 April 1960 can save up to £10,200. The full amount can be invested in a stocks-and-shares Isa with one provider, or up to £5,100 can be saved in a cash Isa with one provider, with the rest saved in a stocks-and-shares Isa with the same, or a different provider.

Savers who were born after 5 April 1960 can save up to £7,200. This will rise to £10,200 from 6 April this year.