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Treatment of income units within an ISA
Comments
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That's right, some of my funds our bond funds, and they pay me back money every three months as a tax rebate, I also hold Equity Income funds which do not pay me anything extra.What sorcerer is referring to (I'm fairly certain) is actual cash added to the balance of his S&S ISA from bond funds that distribute interest net of basic rate income tax.0 -
As I understand it ...
A company pays corporation tax and holders of shares in the company (outside an ISA or Pension) get a 10% tax credit which can be used to offset income tax due in the year (for Basic Rate tax payer, the tax due is equal to the tax credit so there is generally nothing to do).
When shares are held in an ISA (or Pension) the corporation tax is still paid but individuals don't get the 10% tax credit. Additionally, high rate tax payers (and Extended rate tax payers) have no further income tax to pay regardless of other income.0
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