Stocks and shares ISA vs nominated account?

Question

I'm thinking of signing up for a stocks and shares ISA but want to clear up a few points:

1.You can only have £3600 max in a stocks and shares ISA, but is this the maximum amount you can invest or a limit on how much you can make? if so, what if you make more than that amount?

2. how does what you make from dividends affect income tax?

3. Assuming you make less than the CGT Annual exemption amount of £9600 would it be worth going with a ISA over a nominee account from a income tax POV?

http://www.hmrc.gov.uk/rates/cgt.htm

Answer 1

£7000 is the maximum annual investment in maxi ISA of wghich £3000 can be cash. You can make as much profit as you can, all free of CGT. ISA are not exempt frm IHT however and must contain stocks listed on a recognised stock exchange (bot AIM) I am not sure abouit dividends because most are reduced by the 20% tax credit, so maybe the taxable element is 10% which you wouldn't pay in an ISA. They are more beneficial therefore for a higher rate tax payer, although the benefit is to build up over the years a tax sheltered fund. Basically ISA profit and dividends are exempt from income tax in an ISA and don't even have to be declared. You would have to work out the admin. charge of an ISA, or what you are losing on the interest rate on a cash ISA and what you are gaining in tax to see if it is worth it. As they say don't let the tail (tax advantage) wag the dog (Investment criteria)Always look at the benefits/risk of the investment and then the tax benefit..