S&S ISA Tax?

PaintItBlack

Hi all,

Simple question (Hopefully) -

I've been looking into S&S ISA's and a little confused due to something I read on hl.co.uk -

' Interest on cash in a Cash ISA is paid gross. Within a Stocks & Shares ISA the income is only paid gross on corporate and government bonds, on everything else, including cash, the income is paid net of basic rate tax but doesn't incur higher tax rates.'

However, on hmrc.ork.uk it says -

'You pay no tax on any of the income you receive from your ISA savings and investments. This includes dividends, interest and bonuses.'

So do you pay basic rate tax on profit from shares/trackers etc. in a S&S ISA? I thought not but the hl.co.uk quote seems to say otherwise, maybe I'm misreading it?

Thanks,

PIB

Lokolo

HL are correct in what they are.

The HMRC is ambiguous and should really be rewritten, seperating Cash and S&S.

A Cash ISA will have all interest tax free.

A S&S ISA will have 20% deducted from account interest made from cash (not from investment interest, investment dividends or investment gains).

CLAPTON

dividends are paid with a 10% pay tax credit

the credit is not reclaimable as such even if in an ISA

if the dividends are paid into an ISA then no (further) tax is payable

Linton

PaintItBlack wrote: »

Hi all,



So do you pay basic rate tax on profit from shares/trackers etc. in a S&S ISA? I thought not but the hl.co.uk quote seems to say otherwise, maybe I'm misreading it?

Thanks,

PIB

Profit and income from shares and corporate or government bonds is all tax free in an S&S ISA. The problem is if "investments" that were actually really savings accounts were tax free in an S&S ISA why would any one bother with the more tightly restricted Cash ISA. So such income is taxed. Normally its not a significant matter as there is little reason to keep large amounts of cash in an S&S ISA.

PaintItBlack

OK thanks that makes sense.

IronWolf

You generally wont get interest on cash in a S&S ISA so you don't really need to worry about it, just treat everything as being tax free

grey_gym_sock

IronWolf wrote: »

You generally wont get interest on cash in a S&S ISA

if you're lucky, you might get 0.05%