Income Tax on Bonds

sunnyyorkshire

RayWolfe wrote: »

Oh yes. You will get the tax back, but not necessarily at the same time that the interest is paid. On a point of detail the tax is ALWAYS paid and then reclaimed (by someone other than you).
So, to summarise, if you want to hold bond funds and you have space in your S&S ISA, then that is the place to put it.

Thanks Ray.

baby_boomer

pauldreed wrote: »

I have a mixture of Bonds and Equity Funds in a Portfolio, and which I hope to transfer some over into an ISA in April and wondered which should be prioritised for moving into the ISA.
I don't draw an income from any of the investments, but have read somewhere that UK Bonds attract Income Tax, and therefore should be prioritised?
I can't find the article now, but is that so?

You can't move any of these into an ISA. You will have to sell them first and move cash into an ISA (£10,200 being the existing limit for the new tax year 2010/11)

Corporate Bonds are exempt from tax in an ISA. Is that what you mean by "UK Bonds"? The word "bond" is the most ambiguous in the investing dictionary. It is also strangely associated with fixed term cash accounds (which also can't be transferred into an ISA).

pauldreed

baby_boomer wrote: »

You can't move any of these into an ISA. You will have to sell them first and move cash into an ISA (£10,200 being the existing limit for the new tax year 2010/11)

I understand so, and I will have to pay the initial fee again (less H-L's discount).

baby_boomer wrote: »

Corporate Bonds are exempt from tax in an ISA. Is that what you mean by "UK Bonds"? The word "bond" is the most ambiguous in the investing dictionary. It is also strangely associated with fixed term cash accounds (which also can't be transferred into an ISA).

As per post 3, Invesco Perpetual Global Bond and M&G Strategic Corporate Bond, but will be purchasing some more bonds to supplement them and balance my portfolio in April. I have no fixed term cash accounts.