Money market fund for cash

eskbanker

dt17634 said:

Doctor_Who said:

dt17634 said:

Albermarle said:

I'm not sure on the rules of ISAs and hoped someone could help

In fact your question is not about ISA rules at all, but about investment strategy.

An ISA is just somewhere you can hold investments protected from tax ( although there are quite a lot of rules about how much you can add, how many you can have , there are different types of ISA's etc )

How you invest the money when it is in a S&S ISA, is a totally different subject.

Best not mix the two up ( as many do ). 

Do you pay tax on the interest from a money market fund assuming the 20k ISA limit is already used up? Thanks

If held in an ISA (or SIPP) then you don't pay tax on the interest from a money market fund. If held in a GIA then you may pay tax depending on the total amount of interest you earn and whether you exceed your PSA or not.

So the 20k limit can be exceeded by interest payments from a MM fund?

The £20K annual allowance only relates to contributions made into the ISA from your non-ISA accounts, and isn't affected by subsequent income or growth generated within the ISA.

Beddie

dt17634 said:

Doctor_Who said:

dt17634 said:

Albermarle said:

I'm not sure on the rules of ISAs and hoped someone could help

In fact your question is not about ISA rules at all, but about investment strategy.

An ISA is just somewhere you can hold investments protected from tax ( although there are quite a lot of rules about how much you can add, how many you can have , there are different types of ISA's etc )

How you invest the money when it is in a S&S ISA, is a totally different subject.

Best not mix the two up ( as many do ). 

Do you pay tax on the interest from a money market fund assuming the 20k ISA limit is already used up? Thanks

If held in an ISA (or SIPP) then you don't pay tax on the interest from a money market fund. If held in a GIA then you may pay tax depending on the total amount of interest you earn and whether you exceed your PSA or not.

So the 20k limit can be exceeded by interest payments from a MM fund?

Yes, that's right. the £20k is how much you can put in each year. If it doubles in value it's still all exempt from tax.