When does is it not worth it to have a Share ISA?

onmyd

I have a Halifax Stocks and Shares ISA. I no longer contirbute into it (retired and 74 years old). I receive around 300 in dividends every year, but pay 40 in the annual charge and anout 2 pounds in dealing charges (I think because dividends are reinvested).

When does the amount I am saving in tax outweigh the charges? (I'm not sure if the dividends are paid net or gross). I am a 25% rate tax payer. Thanks

zagfles

onmyd wrote: »

I have a Halifax Stocks and Shares ISA. I no longer contirbute into it (retired and 74 years old). I receive around 300 in dividends every year, but pay 40 in the annual charge and anout 2 pounds in dealing charges (I think because dividends are reinvested).

When does the amount I am saving in tax outweigh the charges? (I'm not sure if the dividends are paid net or gross). I am a 25% rate tax payer. Thanks

You're probably not saving any tax at all, ISAs can't reclaim tax on dividends. Only saving might be capital gains if/when you sell or if you earn over £25k the dividends might reduce your age allowance.

Presume you meant 20% tax payer there is no 25% rate

onmyd

Yes, 20% tax payer.

So the advantage of a share ISA is only for the capital gains aspect if don't earn over 25k?

zagfles

onmyd wrote: »

Yes, 20% tax payer.

So the advantage of a share ISA is only for the capital gains aspect if don't earn over 25k?

Pretty much, unless you claim tax credits or other benefits which are affected by your taxable income.

Or if the ISA is invested in "interest" paying investments such as corp bonds - I believe the tax credits can be reclaimed on these, but the can't on dividends.

xylophone

https://forums.moneysavingexpert.com/discussion/3910533 post 4.