The Individual Savings Account scheme allows UK residents to save up to £20,000 tax-free each year in an ISA. The interest, income or capital gains from this account are tax-free.
Suppose I have put £20k in my ISA, and due to gains it is now worth £21k. What happens to this money after the 2017-2018 tax year ends and the 2018-2019 starts?
- Do I have to withdraw the £21k and start a new ISA from scratch?
- Or can I accumulate a further £20k into this account the following year, reaching a total of £41k in the account, all of it netting tax-free gains?