Two Simple Questions Please

Quarkrad

Apologies for these simple questions - appreciate any help.

1. I understand if one takes out an isa the income generated after year 1 is tax free. If you do not take out a second isa in year 2 but leave the original investment where it is, what happens in years 2, 3, 4, etc in terms of 'tax free'. Do you have to pay tax in these subsequent years - or is it tax free for ever?

2. Related to above. If you take out new a new isa each year do you only get tax relief once (in the first year) for each isa or do you in effect get a growing income/investment tax free for ever?

BruceyBonus

1. Once in an ISA, it remains tax free for as long as ISAs are around.

2. It remains tax-free. Even the interest that it paid into the account remains tax free.

oldfella

1- for ever, assuming they dont change it

2- each year - its best to get the interest paid back into the account as in time you get tax free interest on the interest, and its not part of the maximum deposit currently £3600

McKneff

we were away for the budget, heard mention of ISA allance going up but now cant find anything, does anyone on here know.

agsnu

anniehanlon wrote: »

we were away for the budget, heard mention of ISA allance going up but now cant find anything, does anyone on here know.

http://forums.moneysavingexpert.com/showthread.html?t=1642075