Clarity please on ISA Information I have just read

GillyFlower

I have just downloaded an article on ISA's from Investment UK and just started to read it and there, as a bulleted point, was this -

'Money held in the cash component of an ISA is entitled to a tax re-claim of 20%'

Does that mean -

(a) Which - I am sure it doesn't my husband who is a non-taxpayer now could claim something back???

(b) What I think it is saying - am I correct -when you actually cash in your ISA the interest element could, if you are a tax payer, attract tax on un-earned income at 20%

Thanking someone in anticipation to help me read it correctly.

Cannon_Fodder

Interest on Cash ISA's is tax-free...

I suppose the way they've worded it is probably a technically correct Tax office way of saying it, but as far as I know, the "re-claim" is all handled automatically within the ISA - nothing to worry about during or after for the individual...

dunstonh

I believe you will find that they are talking about cash holdings inside an investment ISA (stocks and shares ISA).

Cannon_Fodder

Its not exactly clear, as they also say...

"Interest paid on cash held temporarily in a stocks and shares ISA will be taxed at a rate of 20%, but higher rate taxpayers will suffer no further tax liability."

http://www.investmentuk.org/FactSheets/ISAs/Benefits.asp

cheerfulcat

Going by the fact that they use the same phrase about income from corporate bonds ( " entitled to a tax re-claim of 20% " ) I assume that they are talking not about the cash in a stocks and shares ISA but the cash part of those Maxi ISAs which have both a cash and a S&S component, and that they do indeed mean that the provider claims back the tax.