It is normal for the value of any ISA to go up and there is no limit on this. The limits are on how much you can pay in. Many self-select ISAs will let you trade as much as you like and the investments stay in the ISA unless you give instructions to withdraw.

You are allowed to hold cash in a stocks and shares ISA under certain circumstances which are outlined here.

http://www.hmrc.gov.uk/isa/faqs.htm#25

Hi,

There is one thing about ISAs that I can't find to be explained anywhere. Can I trade (sell, buy, sell, buy, and so on...) within an ISA after the value of my portfolio exceeded the yearly limit? Everyone tells me that I can trade within an ISA, but to do that it should have some flexibility. Let me explain it:

- I invest £10680 in S&S self-select ISA in 2011 (for example in shares or ETFs).

- The value of my investments grow to £11600 in a couple of months.

- I sell some (or all) my investments, and buy something that is cheap. I might sell/buy more than the yearly allowance of £10680!

- I buy something that I think is cheap, and my investments still keep on growing. (Am I still fully within my ISA?)

- After a couple of trades my portfolio reaches £20000 - and I still sell and buy larger amounts, sometimes more than £10680 in one trade. Is this still within my ISA?

- In between selling and buying my money has to be held in cash - for at least a short period, until I decide what I buy. Is this allowed? If yes, how long can I hold this amount in cash before buying again? There can be situations when I must sell something quickly, but I do not yet know what to invest in again. So can my money wait uninvested, while still within an ISA?

(N.B: I never again put money into my ISA once it is maxed out, I only trade with what is in it.)

I am not sure I understand how this works, so any help or explanation would be appreciated.

Regards: Peter