A question about cash isas

[PinkPenguin36]

Please forgive my ignorance but I have a question about cash isas and can't find a clear answer from google!

We have some business profits to save (this will be ongoing, not massive amounts). My husband has a cash isa and has saved the cash allowance for this tax year. When it gets to April 6 can he then add in the cash allowance again in the new tax year? And so on every year thereafter? Eg save approx £5k per tax year, tax free, so after 4 years for example have £20k in it??

Thank you

Thank you - so if yu kept adding in the cash allowance each tax year you can end up with a sizeable tax free lump sum?? Saving for a house deposit!

It's actually gone up a little for 2013/14 to £5,760. You can keep adding to the same ISA each year but some providers allow you to open a new one and transfer your existing balance in using the 'ISA wrapper'. Worth doing a few comparisons before deciding.

Probably stating the obvious here, but the interest accrued on the money in the ISA is tax free, but you still have to pay tax on the business profits before you put it in.

mrsminivers no not stating the obvious but he is doing it above board with tax etc! Just don't want to pay tax on saving for our deposit! :)

Incidentally... you also have a Cash ISA allowance. If he's already used up his allowance for 2012/13 there's nothing to stop you opening one in your name and depositing £5,640 before April. Then you can deposit £5,760 each in 2013/14 and so forth.

Thank you cogito :)