Investors poured £28bn into stocks and shares Isas during the 2022-23 tax year, but did you know that there are some assets you’re not allowed to hold in these popular accounts?
If you’re considering opening a stocks and shares Isa in the new tax year, our handy list shows seven common types of asset you’re allowed to include, and five that you’re not.
We’ll also explain the basics of what a stocks and shares Isa is, and the pros and cons of opening one.
Please note: the content contained in this article is for information purposes only and does not constitute financial or investment advice.
What is a stocks and shares Isa?
A stocks and shares Isa is a tax-free investment account that lets you put money into a range of different investments.
Currently, you can invest up to £20,000 each tax year into an Isa.
Stocks and shares Isas are offered by several banks, but are most commonly available from investment platforms.
Earlier this month, we published our guide to the best stocks and shares Isas for 2025, and named two Which? Recommended Providers based on quality of service and low fees.
Which assets can you hold in a stocks and shares Isa?
There are many different types of assets and investments that you’re allowed to hold within an Isa.
However, bear in mind that just because an asset is allowed by HM Revenue and Customs (HMRC), this doesn’t mean a provider will necessarily offer that particular investment via its platform.
Use our best investment platforms guide to help you decide which one is right for you.
Here are some of the most common assets you can hold within a stocks and shares Isa.
1. Shares
Individual company shares which are publicly listed on recognised stock exchanges anywhere in the world can usually be held within a stocks and shares Isa.
Bear in mind that buying and selling shares listed on a foreign exchange usually incurs additional costs on top of ordinary trading fees.
- Find out more: how to buy shares
2. Investment funds
Investment funds (known as mutual funds in the United States) are collective investment schemes which pool your money with that of other investors to give you a stake in a ready-made portfolio.
There are several different types of funds which can be held in an Isa, including equity funds, tracker funds, unit trusts and Open-Ended Investment Companies (OEICs).
- Find out more: investment funds explained
3. Exchange-traded funds (ETFs)
Exchange-traded funds are listed on a stock exchange, so you can buy and sell them at any time the exchange is open.
ETFs can be more transparent, liquid (meaning you can move money in and out of them easily) and flexible than unit trusts and OEICs.
Because ETFs are traded on the stock exchange, they may incur extra trading fees from investment platforms.
- Find out more: why are ETFs so popular with investors?
4. Investment trusts
Similar to funds, investment trusts allow you to pool your money with that of other investors to get exposure to a range of assets through a single investment.
Unlike most funds however, trusts are set up as companies and are traded on the London Stock Exchange. When you invest in an investment trust, you become a shareholder in that company.
- Find out more: investment trusts explained
5. Corporate bonds
A corporate bond is effectively a way of lending money to a company. In return, they pay you a regular income in the form of interest for a set period of time, after which they must repay your loan.
- Find out more: investing in bonds explained
6. UK government gilts
Governments issue bonds to raise money to finance projects or day-to-day operations. Bonds issued by the UK government are called ‘gilts’.
Like corporate bonds, if you buy a gilt the government will pay you a regular income in the form of interest payments (called ‘coupons’) for a set number of years until the gilt matures and the government repays your initial investment.
7. Fractional shares
Some companies have reached such high valuations that a single share can cost hundreds of pounds.
Fractional shares offer an option for investors who want to hold shares in these companies, but don’t want to invest such large sums. Buying a fractional share means you own a portion of a single share.
Which assets can’t be held in a stocks and shares Isa?
There are certain assets which HMRC forbids you to hold within a stocks and shares Isa. These include the following:
1. Cryptocurrency
Cryptocurrencies such as Bitcoin cannot currently be held within a stocks and shares Isa.
However, you can invest indirectly by purchasing shares in firms which are heavily involved in the cryptocurrency sector, or via funds that hold crypto-related investments.
Be aware that investing in cryptocurrency, and by extension firms involved in the crypto space, is highly risky.
- Find out more: what is Bitcoin? – cryptocurrencies explained
2. Property
You can’t hold direct property investments within a stocks and shares Isa. However, you can invest in funds which hold property within their portfolio.
3. Alternative assets such as classic cars, fine wine and art
These types of assets cannot be held within an Isa wrapper. You could instead purchase shares in a publicly listed company that specialises in holding or trading them.
4. Peer-to-peer loans
You can’t hold peer-to-peer loans in a stocks and shares Isa – but you can in an innovative finance Isa.
5. Unlisted shares
Shares which aren’t publicly traded on a recognised stock exchange can’t be held within a stocks and shares Isa. This includes shares in private companies.
As an example, someone who ran their own limited business couldn’t put those shares in an Isa.
The pros and cons of a stocks and shares Isa
If you’re thinking of opening a stocks and shares Isa, there are a couple of attractions.
First, money held within the Isa wrapper is tax-free, and second, stocks and shares investments often garner bigger returns than interest on cash deposits (for example in a cash Isa).
However, there’s more exposure to risk. The success of your investments will be dependent on the market, and, as with all investments, there’s no guarantee you’ll get your money back.
Additionally, some investment platforms charge monthly or annual fees, along with management fees for buying shares.
- Find out more: stocks and shares Isas – the basics