Barclays drop isa rate

eskbanker

joerugby wrote: »

That's a very short term answer if I may say so. Giving up £70k tax shelter requires careful long term consideration

For example, there could be a lot of value in the future in being able to shelter £70k worth of fund investments from the new dividend tax and from CGT

As they say, once it's gone, it's gone

Which answer were you referring to (most weren't advocating taking all of the £70K out of tax shelter)? To a certain extent your point is valid but it's much easier to get £70K into tax sheltering now (<5 years allowances) than the 20 or so years worth of allowances (excluding growth) it previously would have taken to accumulate that sort of ISA pot, so the argument holds less water now than it would have done a few years ago.

bigadaj

joerugby wrote: »

That's a very short term answer if I may say so. Giving up £70k tax shelter requires careful long term consideration

For example, there could be a lot of value in the future in being able to shelter £70k worth of fund investments from the new dividend tax and from CGT

As they say, once it's gone, it's gone

Not really. As eskbanker says this could be replaced in a relatively short period of time now, and the change in taxation of dividends may well not affect and may benefit someone with this sort of level of investments. £5k tax free per year at a dividend yield of 3-4% would mean well over £100k of dividend yielding investments being held before any tax were due, a better situation for higher rate taxpayers and no worse for standard rate than the current situation.

Similarly with current capital gains tax allowances that sum could be taken out with no tax to pay in a maximum of 7 years.

savings_my_hobby

joerugby wrote: »

That's a very short term answer if I may say so. Giving up £70k tax shelter requires careful long term consideration

For example, there could be a lot of value in the future in being able to shelter £70k worth of fund investments from the new dividend tax and from CGT

As they say, once it's gone, it's gone

Don't forget that from april'16 you can earn £1000 interest tax free.
I'd be inclined to max that out first, (<£30,000 if you have multiple current accounts).Then use the other £40k in an Isa at a much lower interest rate, So effectively £70,000 is still tax sheltered.