Tax - Stocks and shares ISA

leightonjones

Hypothetically, if you were to make £50K profit trading shares within an ISA, what would happen if you withdrew that cash into your current account. Obviously, there is no tax within the ISA itself but does that £50K become an automatic gain under the CGT regime as soon as it enters the real world? i.e. would the £50K (less that CGT allowance) be taxable? It would seem unfair if so given that the gain was initially made in a tax exempt ISA wrapper. I can't find anything about this online but surely it's a pretty fundamental question.

eskbanker

There is no CGT (or tax on dividend income) while within the ISA, but once the proceeds are taken out of the ISA umbrella, then any subsequent income from the value of the withdrawn amount would be taxable.

Linton

Whatever happens inside an ISA is free of both income tax and CGT. No tax is payable on withdrawing money from an ISA.

AnotherJoe

leightonjones wrote: »

Hypothetically, if you were to make £50K profit trading shares within an ISA, what would happen if you withdrew that cash into your current account. Obviously, there is no tax within the ISA itself but does that £50K become an automatic gain under the CGT regime as soon as it enters the real world?
No.Otherwise the whole concept of an ISA would be pointless.
i.e. would the £50K (less that CGT allowance) be taxable?
No.
It would seem unfair if so given that the gain was initially made in a tax exempt ISA wrapper. I can't find anything about this online but surely it's a pretty fundamental question.

Non-hypothetically, nothing at all.

MDMD

Although the S&S platform may charge you. Although withdrawals are free, HL want to charge me £25 plus VAT to close my account which means that I can’t withdraw the last £10 from my ISA.

webjaved

MDMD wrote: »

Although the S&S platform may charge you. Although withdrawals are free, HL want to charge me £25 plus VAT to close my account which means that I can’t withdraw the last £10 from my ISA.

Crikey! :eek: £25 plus VAT just to close down the account?

leightonjones

Thanks for the responses.

talexuser

MDMD wrote: »

HL want to charge me £25 plus VAT to close my account which means that I can’t withdraw the last £10 from my ISA.

Out of interest, will they not let you withdraw down to £1, or £0.01?

eskbanker

talexuser wrote: »

Out of interest, will they not let you withdraw down to £1, or £0.01?

The charge becomes payable once the balance drops below £50, according to https://www.hl.co.uk/help#charges-and-fees/account-management-fees/account-management-fees/is-there-a-charge-to-close-an-hl-account:

Is there a charge to close an HL Account?

Yes. There is a charge of £25 + VAT to close an HL Account. This will be applied automatically when the balance of your account falls below £50 (where no stock is held). We shall waive our account closure fee when an account is closed to move stock or cash to another Hargreaves Lansdown account.