An Individual Savings Account (ISA) is a tax-efficient savings and investment account that allows you to earn interest or returns without paying tax on them.

To apply for an ISA account you must be a resident of the UK for tax purposes. This includes British citizens, residents of the Isle of Man, and the Channel Islands. You must be at least 16 years old to open a Cash ISA. For Stocks & Shares ISAs and Innovative Finance ISAs, you need to be at least 18 years old. To open a Lifetime ISA, you must be between 18 and 39 years old. You should have a National Insurance number, which helps to verify your identity and residency status.

The main types of ISAs include:

• Cash ISAs: Savings accounts with tax-free interest.
• Stocks & Shares ISAs: Investment accounts for stocks, bonds, and other assets with tax-free capital gains and dividends.
• Lifetime ISAs: Designed for first-time home buyers and retirement, offering a government bonus on contributions.
• Innovative Finance ISAs: Involve peer-to-peer lending and other alternative finance investments.
• Flexible Cash and Stocks & Shares ISAs: A flexible ISA allows you to withdraw money and replace it within the same tax year without affecting your annual allowance.

Please note that we currently offer a Flexible Stocks and Shares ISA only.

For the tax year 2024/25, the annual contribution limit is £20,000. This total can be spread across different types of ISAs. More information here.

The primary difference between a standard Stocks and Shares ISA and a flexible Stocks and Shares ISA lies in how withdrawals and replacements affect your annual contribution limit. 

Standard Stocks and Shares ISA

If you withdraw money from a standard Stocks and Shares ISA, that amount is removed from your ISA balance, and it cannot be replaced within the same tax year without affecting your annual contribution limit.

You can contribute up to the annual ISA allowance (currently £20,000 for the 2023/24 tax year) across all ISAs. Withdrawals do not add back to this limit.

Flexible Stocks and Shares ISA

In a flexible Stocks and Shares ISA, you can withdraw funds at any time. The key feature is that you can replace any amount you withdraw within the same tax year without affecting your annual contribution limit.

If you withdraw £1,000, you can contribute an additional £1,000 later in the same tax year without it counting against your £20,000 limit. This allows for greater flexibility in managing your investments.

When choosing between the two, consider your need for flexibility and how often you anticipate needing to access your funds.

If you exceed the ISA limit, the excess contributions may incur tax, and you may need to remove the excess amount from your ISA account.

Yes, any withdrawals from an ISA are tax-free, regardless of the type of ISA.

Yes you can have multiple ISAs. There's no limit to the number of ISAs you can have, but you can't exceed your annual ISA allowance of £20,000.

A flexible ISA allows you to withdraw money and replace it within the same tax year without affecting your annual allowance.

0% commission equivalent up to £100 000 EUR turnover. Transactions above this limit will be charged a commission of 0.2% (min. 10 GBP). Please note 0.5% currency conversion cost may apply.

In order to open a Flexible Stocks & Shares ISA account, you need to create a Real account with XTB in GBP. Please note, to open an ISA account you need to be a UK resident and provide your National Insurance number.

How to create an account with XTB

At XTB we request clients to fill out an online application form either through the website or the mobile app. Within this application process, you will need to undertake a relevant assessment, consisting of 4 multiple choice questions. This step is essential to ensure your compatibility with the product.

Upon successful completion of the application, you will be prompted to submit Know Your Customer (KYC) documents, such as identification and proof of address, in order for us to authenticate your identity. Once the KYC process is finalised, your trading account will be established.

With the trading account active, you will gain unrestricted access to both the trading platform and the client office. This provides you with the opportunity to acquaint yourself with the software and, if desired, make an initial deposit to commence your trading activities. 

If you already have an account in GBP with XTB, please click the "Save" button and select “Flexible Stocks & Shares ISA.” Enter your National Insurance number in the correct format. If you need assistance obtaining your NI number, please contact HMRC. Once you’ve filled out all the required information, you’re all set! Top up your account and your ISA. Remember, it’s your responsibility to ensure you don’t exceed the annual limit across all ISA accounts.

XTB currently doesn’t permit ISA transfers (to XTB) but plans to do so in early 2025.