We know tax isn’t always the most exciting topic, and for many people, it can feel confusing or even off-putting. But the great news is that ISAs are one of the simplest and most powerful ways to protect your investments from tax.
At InvestEngine, we’re here to make it easier to understand- and to help you make the most of your ISA allowance.
And while we can’t give personal tax advice, we’ll always point you to the right resources. If you’re unsure about your situation, it’s worth speaking to a qualified tax adviser.
What’s tax-free in an ISA?
When you invest through a Stocks & Shares ISA, you won’t pay:
- Income tax on dividends or bond interest
- Capital gains tax when your investments grow
- Tax on withdrawals
For most investors, that means more of your money stays invested and no extra paperwork at the end of the year.
Check out HMRC’s official ISA rules for a full breakdown.
Withdraw and reinvest without losing tax protection
All InvestEngine ISAs are Flexible ISAs, which means:
- You can withdraw money and put it back later in the same tax year
- Your ISA allowance is preserved, and tax benefits are maintained
Learn more about Flexible ISAs here.
Without an ISA, you could pay…
If you invest outside of an ISA (e.g. in a General Investment Account), you may be subject to:
- Dividend tax if your annual dividend income exceeds your allowance (currently £500 in 2025/26)
- Capital gains tax if your total gains exceed the CGT exemption (currently £3,000 in 2025/26)
- Income tax on interest payments from certain ETFs or bond funds
You can read more on tax on dividends here, or if you’d like more information it might be best to get in touch with a tax advisor.
Need more information?
- GOV.UK guide to Individual Savings Accounts (ISAs)
- HMRC guidance on ISA rules and limits
Tax treatment depends on your personal circumstances and may change in future. If you’re unsure, we recommend speaking to a tax adviser.