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Fix ISA or Bond
norton2000
Posts: 10 Forumite
What is the difference between a two year Fixed ISA and a two year Fixed Bond ?
Thanks.
Thanks.
0
Comments
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You pay tax on the interest (assuming you pay tax at all).0
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A two year fixed ISA is a two year fixed bond held within an ISA wrapper. i.e if you are a tax payer, you will pay tax on the interest on a 2 year fixed rate bond but no tax on a 2 year fixed rate ISA.0
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Interest earned within a cash ISA is not subject to income tax. An ISA is a tax shield that may or may not be useful depending upon how much income an individual earns. A savings bond is not within a tax shield. Hence tax on interest is taken. This may be claimed back if the income of the bond holder is insufficient to warrant income taxation.
What next ? Explain the taxation system !
J_B.0
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