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Please explain loss of ISA interest?

ipri
ipri Posts: 649 Forumite
in Savings & investments
Hi...can someone explain what happens when an isa is cashed in...rather than transfered ....I understand that I lose tax free status....does this mean i cant ever get at the cash?? ian

Comments

  • Baldur
    Baldur Posts: 6,565 Forumite
    ipri wrote: »
    Hi...can someone explain what happens when an isa is cashed in...rather than transfered ....I understand that I lose tax free status....does this mean i cant ever get at the cash?? ian
    You receive the original sum deposited plus any interest earned up to the date of withdrawal - what you lose is the tax free status of the ISA 'wrapper', so any interest earned on the funds after taking them out of the ISA is taxable as usual.
  • RayWolfe
    RayWolfe Posts: 3,045 Forumite
    1,000 Posts Combo Breaker
    Baldur wrote: »
    plus any interest earned up to the date of withdrawal
    Just to clarify: Tax free interest.
  • Baldur
    Baldur Posts: 6,565 Forumite
    RayWolfe wrote: »
    Just to clarify: Tax free interest.
    As it's in an ISA at that stage, it's obviously tax-free - your point is?
  • RayWolfe
    RayWolfe Posts: 3,045 Forumite
    1,000 Posts Combo Breaker
    My point is that the OP seems to know very little and I was trying to help him. Your point?
  • Baldur
    Baldur Posts: 6,565 Forumite
    RayWolfe wrote: »
    My point is that the OP seems to know very little and I was trying to help him. Your point?
    From my post:
    so any interest earned on the funds after taking them out of the ISA is taxable as usual.
  • ipri
    ipri Posts: 649 Forumite
    I got the point....dont lets fight...Actually..I know quite a lot...just not about isas...thats why I ask questions!! thanks again ian
  • littlemrtinkle
    littlemrtinkle Posts: 680 Forumite
    hi, if you take the money out of your isa , you will lose your tax free
    allowance, but not the money, you will get the interest up to that point.

    If you are not happy with your interest rate, fill out a transfer form where you want to move it, really simple process, takes a max of 60 days to move isa.

    p.s not all isas allow transfers in. Some like halifax 3 % fixed do, so in essence go to halifax and tell them you want to move your isa , and you will fill out a isa transfer form. Very simple painless process.
    Mortgage Start jun 2007 £88500 Outstanding Balance £51000
    Overpayments 2007 Nil 2008 £1040 2009 £7853 2010 £10000 2011 aiming for £18000 (6k so far)
    The Early Bird Gets the Worm, but the Second Mouse Gets the Cheese!!
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    Yes Baldur and Ray stop bickering, I am more superior than both of you with my huge 5k post count and my internet penis is clearly twice the size of yours so sh. ;):p:D
  • littlemrtinkle
    littlemrtinkle Posts: 680 Forumite
    lokolo, i also bow to your penis count!! i am a lowly 69
    Mortgage Start jun 2007 £88500 Outstanding Balance £51000
    Overpayments 2007 Nil 2008 £1040 2009 £7853 2010 £10000 2011 aiming for £18000 (6k so far)
    The Early Bird Gets the Worm, but the Second Mouse Gets the Cheese!!
  • Mikeyorks
    Mikeyorks Posts: 10,377 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Lokolo wrote: »
    I am more superior than both of you

    .... but do assure me that, no matter your size, you're not studying English? ;)
    If you want to test the depth of the water .........don't use both feet !
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