Share dealing ISAs: how buying shares in an ISA works

What is a share dealing ISA?

A share dealing ISA is a Stocks and Shares ISA where the saver chooses and buys individual shares, funds or other qualifying investments themselves. It is not a fifth type of ISA: gov.uk lists four, the Cash ISA, the Stocks and Shares ISA, the Innovative Finance ISA and the Lifetime ISA. The FCA says investors who buy shares in public companies directly can also benefit from tax advantages through a Stocks and Shares ISA.

Some platforms also list ready-made portfolios, which are put together for the saver rather than chosen share by share: 15 of the 20 platforms we compare list them. The platform fee comparison lists each platform’s charges, and what a Stocks and Shares ISA is covers the basics.

Share dealing ISAs, at a glance

ISA allowance, all your ISAs together

£20,000

A tax year, from 6 April to 5 April

Tax on dividends and capital gains inside the ISA

None

Nothing to declare on a tax return

Tax or duty on buying shares, usually

0.5%

Stamp Duty Reserve Tax when bought electronically

Platforms we compare that list a per-trade charge for share dealing

6 of 20

6 list it as free

Which shares can you hold?

gov.uk says a Stocks and Shares ISA can include shares in companies. HMRC’s guidance for ISA managers sets the conditions. In HMRC’s terms, shares are qualifying investments if both of these apply:

• they are issued by a company incorporated anywhere in the world
• they are either officially listed on a recognised stock exchange, or admitted to trading on a recognised stock exchange in the UK or the EEA

HMRC says a ‘recognised stock exchange’ is a market designated by HMRC for the purposes of section 1005 of the Income Tax Act 2007, and it publishes the list. The ‘admitted to trading’ route applies to exchanges in the UK or the EEA, while the ‘officially listed’ route carries no such limit in HMRC’s wording. The same guidance covers shares in investment trusts.

AIM shares. HMRC’s list of designated recognised stock exchanges includes AIM among the markets of a recognised stock exchange in the UK, and its table puts AIM in the ‘not listed’ column. So AIM shares come under the ‘admitted to trading’ route rather than the ‘officially listed’ one. HMRC’s ISA guidance itself refers to shares ‘admitted to trading on the Alternative Investment Market, known as AIM’.

Shares that do not qualify. HMRC says qualifying shares do not include nil paid rights bought in the market by the manager, warrants to subscribe for shares, or futures and share options.

Part of a share. HMRC’s guidance allows ‘fractional interests’ in a whole share, held through an ISA manager under the account’s terms, if the whole share is itself a qualifying investment and other conditions are met. These include that the investor has beneficial ownership of the fractional interest.

Employee scheme shares. HMRC lists shares from Schedule 3 Save As You Earn option schemes and Schedule 2 Share Incentive Plans as qualifying even where they would not otherwise qualify, for example because they are not listed on a recognised stock exchange.

Providers choose which shares and markets they offer, so a qualifying share is not necessarily available on every platform. What an ISA can hold covers every ISA type.

Do stamp duty and SDRT apply?

They can. gov.uk says that when you buy shares you usually pay a tax or duty of 0.5% on the transaction. Bought electronically, the tax is Stamp Duty Reserve Tax (SDRT), charged at 0.5% and taken automatically. Bought with a stock transfer form, it is Stamp Duty at 0.5% when the transaction is over £1,000. gov.uk lists existing shares in a company incorporated in the UK, and shares in a foreign company that has a share register in the UK, among the purchases that attract it. It says you do not normally pay Stamp Duty or SDRT on foreign shares bought outside the UK, although other taxes may apply.

gov.uk describes the ISA’s tax benefit as covering interest, income and capital gains. HMRC’s guidance for ISA managers treats stamp duty and SDRT as a cost of buying: any stamp duty or SDRT paid on the purchase of ISA investments must be paid out of cash held in the ISA.

Exceptions. HMRC’s Stamp Taxes on Shares Manual says securities admitted to trading on a recognised growth market, and not listed on that or any other market, are exempt from both the 0.5% and the higher 1.5% charge to SDRT, and from stamp duty. The exemption started on 28 April 2014, and HMRC’s list of recognised growth markets includes AIM. A share that is also listed on another market does not get the exemption.

gov.uk also says you do not pay tax when you buy shares in an open-ended investment company (OEIC) or units in a unit trust from the fund manager. See index tracker and ETF ISAs for funds that follow an index.

What do dealing charges cost?

Platforms charge for trades in different ways. The FCA’s cost tables for firms (COBS 6 Annex 7R) list broker commissions, which they describe as costs charged by firms for the execution of orders, alongside platform fees, mark-ups embedded in the transaction price, stamp duty, transactions tax and foreign exchange costs. HMRC’s guidance for ISA managers says dealing commission must be met from funds within the ISA.

‘Not offered’ means the account does not include share dealing, for example a managed portfolio account or one limited to funds. Where a platform lists a price, it differs by plan, order size, market and how often someone trades.

‘Free’ can still sit alongside other costs. Of the 6 platforms that list share dealing as free, 5 also list a foreign exchange fee as a percentage, and stamp duty can apply to UK company shares whatever the dealing charge. The FCA says making lots of small trades can often be costly in the long run.

The table counts what the platforms list, checked on 29 September 2026. The platform fee comparison shows each platform’s charges, and our Stocks and Shares ISA calculator shows growth after fees at illustrative rates, which are examples, not forecasts.

What are foreign exchange fees?

A share priced in another currency means converting pounds. Platforms can charge for that conversion, and the FCA includes foreign exchange costs among the transaction costs a firm discloses (COBS 6 Annex 7R). The table counts how the 12 platforms that list share dealing as a charge or as free list their foreign exchange fee.

Percentages differ by plan, market and amount, so the table shows whether a rate is listed, not how large it is. A platform that lists no rate on the page we checked may still charge one.

Is there tax on dividends and gains?

Not inside the ISA. gov.uk says you do not pay tax on dividends from shares in an ISA, and that you do not pay Capital Gains Tax on gains from ISAs. More generally, you do not pay tax on income or capital gains from investments in an ISA and do not need to declare them on a tax return.

Outside an ISA the position differs. gov.uk says you pay Capital Gains Tax on the gain when you sell shares that are not in an ISA, above a tax-free allowance of £3,000 for 2026/27, and that a dividend allowance of £500 a year applies before dividends are taxed. An ISA saves tax only where tax would otherwise be due: gains and dividends within those amounts are not taxed outside an ISA either. See how ISA tax works.

How much can you put in?

gov.uk says you can save up to £20,000 a tax year in one account or split the allowance across several accounts, and the tax year runs from 6 April to 5 April. The limit covers every ISA you pay into, not each one. HMRC’s guidance says investors who subscribe to ISAs with different providers are responsible for not exceeding the overall limit, and that an unused allowance cannot be carried forward to the next year. See the ISA allowance for how it splits across ISA types.

Can you move shares you already own into an ISA?

Not directly. gov.uk says you cannot transfer any non-ISA shares you already own into an ISA unless they are from an employee share scheme. HMRC names Schedule 3 Save As You Earn option schemes and Schedule 2 Share Incentive Plans, and says the market value of the shares at the date of transfer counts as the amount subscribed to the ISA.

HMRC’s guidance for ISA managers describes another route. Investments held outside an ISA can be sold and the proceeds subscribed to an ISA, and HMRC notes that the sale is a disposal for capital gains purposes. The subscription can be used to buy the same investments back inside the ISA if conditions are met, which HMRC says is sometimes called ‘Bed and ISA’. The conditions include that the investments are not bought from the investor or the investor’s spouse or civil partner, that they are bought at the open market price, and that any stamp duty or SDRT on the purchase is paid from cash held in the ISA.

What are the risks of buying shares?

The value of investments can fall as well as rise, and you may get back less than you put in. Past performance is not a reliable guide to the future. The ISA changes how investments are taxed, not how they perform, and charges reduce returns.

• One company. The FCA says that with shares in a single company, investment performance relies totally on that company’s share price, and that it is also linked to external factors such as world events and market sentiment. In the short term prices can be volatile, and the FCA says you may lose some of your capital if you have to sell at a lower point than when you invested.
• Spread. The FCA says investment funds offer much greater diversification than buying a small number of shares directly, and that diversification cannot totally eliminate risks.
• No cover for falls. The FCA says that, as the value of investments can fall as well as rise, protections such as the Financial Services Compensation Scheme and the Financial Ombudsman Service do not cover you just because an investment performs badly.

What was planned for 2027?

HMRC’s factsheet, published before the Budget, planned a 22% charge from 6 April 2027 on interest on cash held inside a Stocks and Shares ISA, at every age, and a rule that money market funds would be the only cash-like holdings. It listed individual shares among the investments that would not be treated as cash-like. The Budget documents of 28 October 2026 do not mention these rules and press reports say they are not going ahead as planned, so they are unconfirmed. See cash inside a Stocks and Shares ISA.

How do you open a share dealing ISA?

You open a Stocks and Shares ISA with an ISA provider, and the shares and markets on offer are the provider’s own. Our guide to how to open an ISA covers who can open one and what a provider asks for. This page does not name or recommend any provider, platform or share.