Stocks and shares Isas explained Isa checklist

• Isa rules: Changes to the Isa rules came into force on 6 April 2008. Out go maxi and mini Isas and in come new rules allowing you to transfer existing cash Isas to stocks and shares Isas.
• Higher limits. From 6 April 2012 your total limit is £11,280, with a cash Isa limit of £5,640.
• Risky business: If you invest in a stocks and shares Isa, be prepared to take a risk with your money – there’s no guarantee you'll get back the amount you put in. However, you can spread your risk by investing across a range of investments, from bonds to individual shares.
• Tax: Unlike cash Isas, stocks and shares Isas are not always tax-free. If you're a basic-rate or starting-rate taxpayer with no capital gains, you'll pay the same tax on share-based investments as you would on non-Isa investments. Isa income does not need to be declared on tax returns.
• Older advantage: If you're 65 or over, your income from a cash or stocks and shares Isa won't affect your age-related personal allowance.
• Getting advice: If you're not an experienced investor, get advice from an independent financial adviser (IFA) who's authorised by the FSA.
• Charges: These vary and cover costs, including admin and commission to financial advisers. Charges aren't usually any higher than if you invest outside an Isa – unit trusts, for example, have an initial cost from 0.5 to 5.5% and an annual charge of 1 to 1.5%. Charges usually come out of your investment, unless your IFA accepts a fee instead of commission.
• Fund supermarkets: Ask your IFA about buying through a fund supermarket. You'll get discounts on the initial charge and other benefits, too. If you don't use an IFA, you won't get advice and can't complain if the product's unsuitable.
• Making a complaint: If you're given inappropriate advice by an FSA-authorised IFA, complain. If the complaint is unresolved, take it to the Financial Ombudsman Service.