We are now entering what is often called the ISA season, a time of year when many of us will be considering how we can fully utilise our Individual Savings Account (ISA) allowance. We have provided here answers to some of the questions most commonly asked by our clients.

Q: How long are ISAs going to be around? 

A: Chancellor Gordon Brown has said that he intends ISAs to be the UK's flagship savings and investment products for many years to come. The current £7,000 a year limit for ISA contributions is set until 2005.

Q: What is the difference between a Mini and a Maxi ISA?

A: Each tax year you can take out either one Maxi ISA or up to three Mini ISAs, the proceeds of which are tax-efficient. The Maxi option permits you to invest the full £7,000 annual allowance into shares, bonds or collective investments, such as unit or investment trusts. Mini ISAs allow you to choose from a cash Mini ISA (£3,000 maximum allowance); a stocks and shares Mini ISA (£3,000 maximum allowance); and an insurance Mini ISA (£1,000 maximum allowance). You can take out each Mini ISA with a different company, but you are not permitted to take out a Mini and a Maxi ISA in the same tax year.

Q: We're a married couple - can we both take out ISAs even if one of us doesn't work?

A: Yes, every adult has his or her own ISA allowance. In this particular instance, the Inland Revenue is not concerned with who earned the money. If one of you is not working and is likely to be a non-taxpayer, then it may not seem worth having a tax-friendly ISA in the first place. However, there is no reason not to go down the ISA route. 

Q: Can my children have an ISA?

A: This depends on their ages and on the type of ISA they want. As from the start of the 2001/02 tax year, anyone over 16 can now have a Mini cash ISA. But you need to be 18 to have a Maxi ISA or a Mini stocks and shares or insurance ISA.

Q: Should I delay investing until the stock market begins to rise?

A: Firstly, you should never invest for the short term. In the long term, if the trend of growth is upwards, then you should still profit from investing now. It's also worth remembering that the best time to buy investments is when shares are low, not when they are expensive. So if you have the money to invest and are prepared to give it time to grow, then current market conditions could ultimately turn out to be a good time to invest if markets were to recover.

Q: Are ISAs good for providing an income?

A: ISAs are ideal for generating an income, which is also tax-efficient - and you don't even have to declare any payments you receive on your annual tax return.

Q: I am about to see my old TESSA mature. Can I put the proceeds into an ISA?

A: Yes, (but only the original capital invested, not any interest earned) - and the money won't count against your annual ISA allowance. You have got two options: the first is to choose a special Tessa-Only ISA ("TOISA") for the original amount; the second is to put any surplus (up to a maximum of £3000) into a Mini ISA.

Q: I want to select my own shares rather than using unit or investment trusts.  Can I do this in an ISA?

A: Yes, through a self-select ISA. You simply decide upon an ISA wrapper and then choose which shares or other investments you want to buy within it. These enjoy all the tax advantages of other ISAs. You can also move the money back into a collective investment at some point in the future if you subsequently decide that self-select plans are not for you.