What is the difference between an ISA and a LISA?

An Individual Savings Account (ISA) has an annual allowance of £20,000 per year. Any profit made from investments within an ISA are not subject to capital gains tax (CGT).

Similarly, any profit on investments in a Lifetime ISA (LISA) are not subject to CGT, however the annual allowance is a lower £4,000. The LISA also benefits from a 25% government bonus, meaning LISA holders can receive an additional £1,000 per year.

However you can withdraw from an ISA without a 25% penalty and as the EQi Stocks & Shares ISA is flexible, you can make as many withdrawals as you like and pay it back to your ISA without affecting your annual subscription.

- Submitted on 5th Apr 2021

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