ISAs (Individual savings accounts) are arrangements for UK customers that offer tax benefits when holding savings and investments.
- Lightyear brings you a Cash ISA and Stocks & Shares ISA. You can open one of each, however, the £20,000 allowance is shared across all your ISAs within the tax year.
- Both our ISAs are free to open and come with no monthly fees, they are Flexible and offer to earn interest. See our pricing page for our simple, fair and transparent pricing across all accounts.
How to open an ISA?
If you already have an account with us, log in and go to your profile (top left corner of the mobile app, or top right on web). Here you'll have the option to open a Stocks & Shares ISA and/or Cash ISA, in addition to your existing account.
If you haven’t signed up with us yet, simply download our app or use our website to register. You'll be able to open an ISA as part of the signup process. In total, you can open one Cash ISA and one Stocks & Shares ISA.
Can I move my Lightyear GIA to my S&S ISA?
You can’t directly transfer shares from your GIA to your Stocks and Shares ISA. However, if you wish, you can sell the shares in your GIA, transfer the funds to your S&S ISA, and then rebuy the shares within this ISA.
Can I transfer my ISA to Lightyear or out of Lightyear?
Yes! For now, we can accept Cash ISA transfers and Stocks & Shares ISA transfers made in cash. If you hold a Stocks & Shares ISA elsewhere, this means you’ll need to sell your holdings with your current provider, transfer the proceeds to Lightyear, and then rebuy them within your Lightyear Stocks & Shares ISA. To transfer your ISA out of Lightyear, you need to sell your holdings and transfer the resulting cash to your new provider. Read more about this topic in Transferring my ISA.
What happens if I exceed my ISA allowance?
If you accidentally contribute more than your £20,000 annual allowance, you need to contact HMRC and you may be subject to tax on the excess amount. We have controls in place to avoid exceeding your ISA allowance within Lightyear ISAs, but we don’t have information about your ISAs outside of Lightyear.
Does Lightyear ISA offer a multi-currency account?
No. HMRC rules require that all cash within an ISA be held in GBP. In a Stocks & Shares ISA, you can trade in USD and EUR, but during the order creation, you’ll need to review and accept a conversion (our FX fee is 0.35% from the currency exchanged).
Do I need to declare my ISAs on my tax return?
No, you don’t need to report your ISA investments on your self-assessment tax return, because we do it on behalf of you as your ISA manager.
Why can’t I trade certain stocks or funds in my Stocks & Shares ISA?
HMRC has specific rules and regulations governing which stocks and funds are eligible to be held within an ISA. Therefore you may see some instruments not available in your Stocks & Shares ISA that you can hold in your general account.
How is my ISA protected?
Lightyear UK Ltd is authorised and regulated by the Financial Conduct Authority and as such is bound by strict regulatory obligations in how we handle and protect your money. Customer money always sits separately from our own and is held in Natwest and Qualifying Money Market Funds. In the unlikely event of anything happening to Lightyear, there’s no way for creditors to get hold of the investments or cash that you hold with us. Your investments are similarly held separately from assets of the firm with our sub-custodians subject to similar regulatory obligations.
In addition, Lightyear is protected by the Financial Services Compensation Scheme (FSCS). In the event of insolvency, any shortfall in cash and assets up to £85k across all your Lightyear accounts not returned to you may be claimable with the FSCS. FSCS does not cover losses due to poor investment performance. QMMFs are investment instruments rather than bank deposits and as such not eligible under the FSCS deposit compensation scheme you might be familiar with for banks. However these holdings are protected under the FSCS investment compensation scheme as part of the £85k referenced above - this protects against default of Lightyear in cases where we fail to segregate or handle cash or assets, causing a loss for you. To learn more about how we keep your assets safe, see How are my assets protected?.
If you’ve maxed out your ISA allowance or own a company, along with the ISAs, we also have:
Read also: Just how flexible are flexible ISAs? and Transferring my ISA.