tax and interest on interest earned

Terry_conquest

I understand that the interest earned on saving in a Cash ISA are free from tax.  I have a two year fixed Cash ISA which matures in April. Let's say that over the two years I invested £20,000 per year and so interest is earned on those savings. At maturity I choose to leave my £40,000 plus the interest in the ISA (or transfer to a new one),  So using a rate of 5% (cos it's easy to do the calculations) the interest earned is £3050 So now I have £43,050 in ISA savings. I now add another £20,000 (for this years allowance).  Provided that the £43050 never leaves the ISA will the interest earned next year on the £3050 be tax free? or is it only the interest on the £60,000 which is tax free. I suppose to simplify this is all interest earned in a cash ISA tax free even.  I hope that my question is clear enough for all you wise people to understand. (I'm fairly new to ISA's). 

Ayr_Rage

If the funds stay in an ISA EVERYTHING is tax free, including interest on interest.

It's as simple as that.

Forget the word TAX when talking about any ISA.

Terry_conquest

Excellent news! thank you