📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

S/s isa

I have a self select S/S ISA with HL. The stocks will give me dividends. Is this dividend income tax free as the S/S are within an ISA wrapper?

Thanks for any advice.

Anniel34

Comments

  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    No they are not.

    If you are a higher rate tax payer you will not have to pay the higher amount, but for normal rate tax payer there is no advantage.
  • Thank you for your reply Lokolo,

    If I just leave the money within the investment rather than taking the dividend, does the money remain tax free?

    If not I cannot see the point of a S/S ISA?

    Anniel34
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    Anniel34 wrote: »
    Thank you for your reply Lokolo,

    If I just leave the money within the investment rather than taking the dividend, does the money remain tax free?

    If not I cannot see the point of a S/S ISA?

    Anniel34

    No it will not make a difference if you choose ACC or INC.

    And only point really is Capital Gains, so if you are going to be making a lot of money. Or if you are a higher rate tax payer.

    If these are not likely at all to happen then there isn't much point.

    Although I am not going to be either, the ISA doesn't cost anything so I may as well use it anyway.
  • The income from any gilts and corporate bonds you hold directly in a s/s ISA is tax free.
  • Thank you LardyCake,

    So I will now look at investing into corporate bonds with a track record and decent income?? is there such a thing?

    Anniel34
  • Jonbvn
    Jonbvn Posts: 5,562 Forumite
    Part of the Furniture 1,000 Posts
    Anniel34 wrote: »
    Thank you LardyCake,

    So I will now look at investing into corporate bonds with a track record and decent income?? is there such a thing?

    Yes there is!

    You can buy bonds direct or you can buy bond funds (which is what I do).

    Some Corp Bond Funds
    http://www.h-l.co.uk/funds/Mark-Dampiers-Wealth-150?companyid=&sectorid=150&tab=security_details&x=36&y=9

    & Strategic bond Funds
    http://www.h-l.co.uk/funds/Mark-Dampiers-Wealth-150?companyid=&sectorid=152&tab=security_details&x=33&y=4

    UK Gilt Funds:
    http://www.h-l.co.uk/funds/Mark-Dampiers-Wealth-150?companyid=&sectorid=127&tab=security_details&x=19&y=9
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
  • Is the income from bond funds held in a s/s ISA tax free?
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    LardyCake wrote: »
    Is the income from bond funds held in a s/s ISA tax free?

    Yes, I forgot about that.

    I can't remember the specifics as to which do and don't.
    If you're a basic rate taxpayer dividends receive the same tax treatment regardless of whether they're in an ISA or not, with the 10% tax credit being applied. If you're a higher rate taxpayer though, you will have a tax advantage because you don't have to pay the additional 22.5% that would normally be due on dividends.
    If, however, you buy a stocks and shares ISA where the underlying investment pays interest - such as corporate bonds - then the interest will be tax-free regardless of the tax band you fall into.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.4K Banking & Borrowing
  • 252.9K Reduce Debt & Boost Income
  • 453.3K Spending & Discounts
  • 243.4K Work, Benefits & Business
  • 597.9K Mortgages, Homes & Bills
  • 176.6K Life & Family
  • 256.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.