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  • Baldur
    We have some ISAs. Whilst the cash is in the ISA there is no tax on it. so far so good.

    When the cash is withdrawn it has the interest added.

    I suppose that this has to be declared to the IR and tax paid. If tax is paid on the interest then what is the point of it being "tax free" whilst it is in the ISA ?

    Its clear I'm missing something here ????
    Originally posted by mik93
    ISA funds, including any interest, are tax free, so you would not be required to declare them or be taxed when withdrawing but if they are then paid into a taxable account (let's call it account B), any interest subsequently earned on account B would be subject to taxation.
  • blackpear
    How do I get non-ISA shares into a new stocks & shares ISA?
    I have two shareholdings I have held for several years, prior to PEPs and ISAs.

    Is there any way I can move these into a new stocks and shares ISA?
  • naughtynave
    whos offering the best isa
    i have a isa account with halifax from last year i want to open another isa but with a bank or building society that offers the best interest rate i found that last year barclays offered more interest then halifax which annoyed me so when would be the best time to open an isa and whos offering the best interest?
  • ekim51
    shares isas
    can anyone enlighten me please. I have read somewhere that it is not viable to take out a shares isa unless you are in the 40% tax band as you already pay tax on any dividends earned.
    • david78
    • By david78 25th May 08, 10:37 AM
    • 1,576 Posts
    • 578 Thanks
    david78
    can anyone enlighten me please. I have read somewhere that it is not viable to take out a shares isa unless you are in the 40% tax band as you already pay tax on any dividends earned.
    Originally posted by ekim51
    Basic rate tax payers effectively pay tax at 10% and Higher rate tax payers pay tax at 32.5% on dividends received from share-based investments held outside ISAs. 10% of this is paid "at source" before the net dividend payment is made. Basic rate tax payers have nothing further to pay; higher rate tax payers must pay a further 22.5%.

    For income earned on shares inside an ISA both basic rate and higher rate tax payers pay the 10% at source and nothing more.

    In the long run, there are benefits to basic rate tax payers in an ISA because they may become higher rate tax payers at some point, and of course there is the shelter from capital gains tax.
    • Scottish Lassie
    • By Scottish Lassie 28th May 08, 8:04 AM
    • 76 Posts
    • 453 Thanks
    Scottish Lassie
    Opening a Stocks and Shares ISA
    I have two shareholdings I have held for several years, prior to PEPs and ISAs.

    Is there any way I can move these into a new stocks and shares ISA?
    Originally posted by blackpear

    I have the same query so if anyone can please post a reply it would be much appreciated

    Thanks
  • purdybaker
    Just some advice needed.
    My mother has been investing in ISA's recently, however this year that took out a lump sum to invest in ISA as part of an ongoing agreement (however my mother had forgotten about this). So recently £2000 was taken out to invest in an ISA, this left her back account in arrears.
    To cut a long story short, can she end the £2000 ISA to put the money back into her account and put her account back into the black?
  • memsquared
    Me too please
    I have the same query so if anyone can please post a reply it would be much appreciated

    Thanks
    Originally posted by Scottish Lassie
    I have some BT shares. Can I put them into a shares isa or do have to sell them??:confused:
    Thanks
  • ben1234
    Switching ISA
    Currently i have £5000 in Bradford and Bingley Cash ISA - only £20 or so has been used this year. I want to use £3600 of it (the limit) in the B&B 1 year fixed ISA. I have read the thread and im just clarifying that as long as i dont invest anymore in the old ISA that this is fine? i can keep both accounts? and will the original money left in the original account still get the same rate of interest -and will this therefore be taxed? Thanks
    • cheerfulcat
    • By cheerfulcat 7th Jun 08, 7:24 PM
    • 3,176 Posts
    • 1,352 Thanks
    cheerfulcat
    I have some BT shares. Can I put them into a shares isa or do have to sell them??
    Originally posted by memsquared
    You have to sell them first, then buy them back within a self-select ISA.
  • Beemer
    The tax man cometh...?
    I have around 10k an old ISA, over 3 years old now, and I want to move the money to use for other things; therefore want to remove the money (to put into a high interest savings account) as oppose to transfer this to another Cash ISA.

    Do I assume, as I couldn't see this anywhere, that once I withdraw/close the ISA that I will be taxed (in this case at 40%) on the total amount or is it only on the interest that is earned once it goes into a regular savings account?

    If it is taxed on the total then I am failing to see the point of this unless you always want to save and never use the money (agree with saving is good for you)?

    Any advise would be appreciated...

    Beemer
    • Lokolo
    • By Lokolo 11th Jun 08, 12:01 AM
    • 19,745 Posts
    • 14,752 Thanks
    Lokolo
    See the point in what? Transferring into a high interest savings account? Or having an ISA at all?

    You will be taxed 40% if the money is not in an ISA, so unless you want to spend it, I would keep it in an ISA.
  • veronica46
    isa what do i do with it now?

    Help!
    When i was married we bought me an ISA, now I am divorced I do not know what to do with it at all - apart from you should not cash it in.
    I am not at all sure my current provider is giving me a good rate It is currently held as cash in a stocks and shares ISA. Is that bad / good?
    I am complete novice here. My ex handled the money but was not so very good at it!
    I am completely confused by what I should now do. Is it difficult to transfer between providers? What information will they need to transfer? I don't seem to have a certificate of ownership like you do with a PEP.
    thank you
    Last edited by veronica46; 11-06-2008 at 7:08 AM. Reason: by the way, i am a low earner!
  • veronica46
    Also i just read Beemer and I agree with him (in his confusion)... are we missing the point of the ISA? If we all get taxed in the end anyway?
  • Baldur
    Also i just read Beemer and I agree with him (in his confusion)... are we missing the point of the ISA? If we all get taxed in the end anyway?
    Originally posted by veronica46
    The Cash ISA (both capital & interest) is tax free while in the ISA wrapper - as soon as it's withdrawn and placed into a taxable account, the interest earned in the non-ISA account will be taxable at your normal income tax rate.
  • veronica46
    ISAs are nicer?
    Thanks- I think Isort of got that. So the ISA is gradually earning interest which is non taxable and is added to the capital sum invested.
    So when you take it out the tax man does not suddenly pounce on you as though you had been formerly wearing a cloak of tax-invisibility?
    It is just that the sum if it goes into a building society the amount will then START to be taxed along with all your other dosh in there?
    Sorry I am completely duh about all this! I sold my PEP last year before it fell too far and put the money into a savings account. I don't know if this was right or wrong. probably should have used my ISAallowance you will all say!
    Groan.

    XXV
  • Baldur
    It is just that the sum if it goes into a building society the amount will then START to be taxed along with all your other dosh in there?
    Originally posted by veronica46
    Yes, that's the gist of it. Basically, as you say, putting the maximum (currently £3,600, previously £3,000) into a Cash ISA shelters that cash & interest from taxation. Those of us who have done so from the start of ISAs have significantly more than £35,000 in them.
  • RayWolfe
    Veronica47, you presently have a bad proposition as far as tax is concerned. Tax IS deducted from cash in a stocks & shares ISA. You may be happy with this in current market conditions.
    Read the ISA articles on this site (see top of page for links) then come back if you have some specific questions.
  • Little Chicken
    Now a dopey question from me.... I have 2 cash isas and am about to open another one. When I get interest added to my current two - it gets added straight to my isas- does this need to be taken from this year's £3600 allowance. ie. If I get £600 interest can I only out £3000 into my new ISA?

    Thanks
    Save me from spending...
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  • Baldur
    Now a dopey question from me.... I have 2 cash isas and am about to open another one. When I get interest added to my current two - it gets added straight to my isas- does this need to be taken from this year's £3600 allowance. ie. If I get £600 interest can I only out £3000 into my new ISA?
    Originally posted by Little Chicken
    No, your interest on previous years' funds is irrelevant, you have an allowance of £3,600 for this year (new money).
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