Fixed cash ISA one year monthly interest

CRISPIANNE3

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

Doctor_Who

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

The interest earned from the ISA is completely free of tax. Any interest earned in your current account as a result will be taxable (the first £1000 will be taxed @ 0% (PSA) if you are a basic rate tax payer).

refluxer

AFAIK - the interest earned within an ISA is tax-free, regardless of whether it's paid into the same ISA account or out to an external account.

If it's paid to an external account, it's only the interest earned subsequently from that money that will potentially be subject to tax.

There have been many posts on here in the past from people who've been given incorrect advice from bank employees regarding ISAs, which is pretty concerning.

Dazed_and_C0nfused

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

Utter nonsense.

They couldn't be more wrong if they tried.

CRISPIANNE3

Doctor_Who said:

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

The interest earned from the ISA is completely free of tax. Any interest earned in your current account as a result will be taxable (the first £1000 will be taxed @ 0% (PSA) if you are a basic rate tax payer).

Dazed_and_C0nfused said:

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

Utter nonsense.

They couldn't be more wrong if they tried.

refluxer said:

AFAIK - the interest earned within an ISA is tax-free, regardless of whether it's paid into the same ISA account or out to an external account.

If it's paid to an external account, it's only the interest earned subsequently from that money that will potentially be subject to tax.

There have been many posts on here in the past from people who've been given incorrect advice from bank employees regarding ISAs, which is pretty concerning.

Thank you all for comments.  I feel really annoyed because the advisor kept saying you are not listening to me and I could sense the frustration in the advisors voice because I challenged what they said. I have decided to feed this back to the complaints dept of the bank in the hope they will give feedback to the advisor concerned and to make sure this person does not give out incorrect information in the future.

Doctor_Who

I think you are entirely justified in making a complaint since the information given was completely incorrect.

they will give feedback to the advisor concerned and to make sure this person does give out incorrect information in the future.

I assume this is a typo? 

auser99

Assume the advisor meant that any interest subsequently earnt on that interest would be taxable?

Though you do have to watch what bank workers say.
A relative was told that banks don't report interest back to HRMC and that you have to.
And a young kid told me that his bank "don't offer" a fixed bond savings account anymore, before showing me what they do offer on a screen, immediately bringing up said fixed bond   

Harry227

CRISPIANNE3 said:

Doctor_Who said:

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

The interest earned from the ISA is completely free of tax. Any interest earned in your current account as a result will be taxable (the first £1000 will be taxed @ 0% (PSA) if you are a basic rate tax payer).

Dazed_and_C0nfused said:

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

Utter nonsense.

They couldn't be more wrong if they tried.

refluxer said:

AFAIK - the interest earned within an ISA is tax-free, regardless of whether it's paid into the same ISA account or out to an external account.

If it's paid to an external account, it's only the interest earned subsequently from that money that will potentially be subject to tax.

There have been many posts on here in the past from people who've been given incorrect advice from bank employees regarding ISAs, which is pretty concerning.

Thank you all for comments.  I feel really annoyed because the advisor kept saying you are not listening to me and I could sense the frustration in the advisors voice because I challenged what they said. I have decided to feed this back to the complaints dept of the bank in the hope they will give feedback to the advisor concerned and to make sure this person does not give out incorrect information in the future.

Be careful.  This sort of helpful, accurate feedback to a bank employee (or indeed employees in many of our institutions) could now count as 'harassment' and 'abuse', even if you weren't abusive, or had absolutely no intention of being abusive,  the employee only has to 'believe/feel' you were abusive.  Offence is so easily taken and even sought. You might find yourself being de-banked.  Sad state of affairs we've got ourselves into. 

eskbanker

Harry227 said:

Be careful.  This sort of helpful, accurate feedback to a bank employee (or indeed employees in many of our institutions) could now count as 'harassment' and 'abuse', even if you weren't abusive, or had absolutely no intention of being abusive,  the employee only has to 'believe/feel' you were abusive.  Offence is so easily taken and even sought. You might find yourself being de-banked.  Sad state of affairs we've got ourselves into. 

Do you have anything reliable to substantiate all that?

CRISPIANNE3

Harry227 said:

CRISPIANNE3 said:

Doctor_Who said:

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

The interest earned from the ISA is completely free of tax. Any interest earned in your current account as a result will be taxable (the first £1000 will be taxed @ 0% (PSA) if you are a basic rate tax payer).

Dazed_and_C0nfused said:

CRISPIANNE3 said:

I was in discussion with my bank this am regarding my cash ISA and I put the max amount in for this year.  I have taken out a one year fix and have opted for the monthly interest. The interest will be transferred to my current account each month. 

However according to the advisor the interest earned will be taxable if you exceed your personal allowance of £1,000. 

Can anyone confirm this is correct please?

Utter nonsense.

They couldn't be more wrong if they tried.

refluxer said:

AFAIK - the interest earned within an ISA is tax-free, regardless of whether it's paid into the same ISA account or out to an external account.

If it's paid to an external account, it's only the interest earned subsequently from that money that will potentially be subject to tax.

There have been many posts on here in the past from people who've been given incorrect advice from bank employees regarding ISAs, which is pretty concerning.

Thank you all for comments.  I feel really annoyed because the advisor kept saying you are not listening to me and I could sense the frustration in the advisors voice because I challenged what they said. I have decided to feed this back to the complaints dept of the bank in the hope they will give feedback to the advisor concerned and to make sure this person does not give out incorrect information in the future.

Be careful.  This sort of helpful, accurate feedback to a bank employee (or indeed employees in many of our institutions) could now count as 'harassment' and 'abuse', even if you weren't abusive, or had absolutely no intention of being abusive,  the employee only has to 'believe/feel' you were abusive.  Offence is so easily taken and even sought. You might find yourself being de-banked.  Sad state of affairs we've got ourselves into. 

UPDATE.

I did put in a complaint to my bank. They contacted me the next day after listening to the call and upheld my complaint and they said this will be fed back to the Savings dept who will deal with this.