ISA interest at maturity

PeskyBlunder

flaneurs_lobster said:

Two grand of this year's subscription limit used up that may have been earmarked for other new funds tho'.

Granted - though I was just pointing out that it's not the end of the world.

pipdus

Thanks everyone. Thought I had shot myself in the foot by misunderstanding the ISA interest rules but looks like I didn’t. Thanks for clarifying.😊

jimjames

flaneurs_lobster said:

PeskyBlunder said:

If you don't need the interest you could just add it to your new ISA (assuming the funding window is still open) along with any other money you want to put in. You definitely won't need to pay tax on it in any case.

Two grand of this year's subscription limit used up that may have been earmarked for other new funds tho'.

Although if it is a flexible ISA you might be able to redeposit it without affecting your allowance

pipdus said:

But because they have paid it out of that account, I thought it counts towards the personal allowance of £1000 interest you can earn on savings before you pay tax, so I would need to pay tax on the amount over £1000. Is that not right?

The beauty of ISAs is that all income from them is completely tax free. Some people have ISAs with over £1million in, if they took income from that they could be earning £50,000 per year from it, paid into their bank account, without paying a penny in tax of any sort.