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Is the ISA's tax relief applied to ETFs like VUSA (S&P 500 index tracker), which holds stocks of countries other than the UK?

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Anything held in an ISA is tax sheltered and therefore subject to the tax reliefs (income tax, no Capital Gains tax etc.)

This is true even when you hold stocks of non-UK countries directly, e.g. Microsoft.

There are some types of investment that cannot be held in an ISA (for example, until August 2013 you were not allowed to hold AIM stocks within an ISA). But this is the concern of the ISA manager. So in short, yes if an ETF is available to be held in an ISA wrapper, you can make tax free income or gains on it.

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Yes.

For example this Investors Chroncile article cites a number of overseas-focused ETFs as options to put in an ISA.

10 passive funds for your ISA

Individual providers will be able to confirm the position for specific funds.

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