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Investment Rules
The ISA investment rules are broken down
for each investment component as follows:
Stocks and shares component
Almost call unit trusts, OEICs, FSA-recognised UCITS
funds and UK-listed investment trusts are eligible for
ISAs. Direct investment may be made in shares listed
on any recognised stock exchange. EEA government bonds
and fixed interest securities of companies listed on
any recognised exchange with more than five years to
redemption are also eligible.
Cash is an eligible investment, but only for future
investment - it cannot simply be left uninvested in
a stocks and shares ISA.
The main exclusions are bonds with under five years
to redemption, cash, quasi-cash funds and property funds.
Cash component
The eligible investments are building society and bank
deposits, money market funds which hold cash rather
than short-dated securities and ISA-eligible National
Savings products, excluding Savings Certificates.
Insurance component
A special ISA-only life policy is the only eligible
investment, other than cash to meet future premiums.
The policy must be a life assurance contract on the
life of the ISA investor alone, but may offer subsidiary
health-related benefits such as critical illness cover.
It cannot be a pension or an annuity and must terminate
automatically if it ceases to be held in an ISA.
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