Definition of TESSA in English:
noun (plural TESSAs)
(In the UK) a tax-exempt special savings account allowing savers to invest a certain amount in a bank or building society with no tax to pay on the interest, provided that the capital remained in the account for five years (replaced in 1999 by the ISA).
- Tax-exempt investments such as Tessas and Individual Savings Accounts do not have to be notified to the tax authorities or included on any forms.
- Back in April 1999 the government introduced Individual Savings Accounts which replaced Peps and Tessas.
- Essentially, although tax-free Tessas have been replaced by Individual Savings Accounts, it is still possible to shelter money in accounts already opened.