! year fixed ISA

PaulDesmond

Can someone tell me if  will incure any taxes after I have completed a 1 year fixed term ISA. I heard that when you withdraw from an ISA you are taxed. If after 1 year I may look again for another 1 year fixed ISA. I am not talking about withdrawing early, only at the end f the year.

moneyfactscompare.co.uk has a Castle community bank one with 4.52%

Thanks. Paul.

wmb194

PaulDesmond said:

Can someone tell me if  will incure any taxes after I have completed a 1 year fixed term ISA. I heard that when you withdraw from an ISA you are taxed. If after 1 year I may look again for another 1 year fixed ISA. I am not talking about withdrawing early, only at the end f the year.

Thanks. Paul.

Heard from where? No, within an ISA it’s all tax free.

If you withdraw it from the ISA and place the money in a taxable account then interest earned in that account might be taxable if you exceed the various tax thresholds.

Ayr_Rage

ISAs and their interest, dividends and capital gains ARE NEVER TAXABLE.

If you subsequently invest the proceeds in a non-ISA product then any income, dividends or capital gains may be subject to tax depending on amounts and your personal tax position.

It really is that simple.

Dazed_and_C0nfused

PaulDesmond said:

Can someone tell me if  will incure any taxes after I have completed a 1 year fixed term ISA. I heard that when you withdraw from an ISA you are taxed. If after 1 year I may look again for another 1 year fixed ISA. I am not talking about withdrawing early, only at the end f the year.

moneyfactscompare.co.uk has a Castle community bank one with 4.52%

Thanks. Paul.

Whoever or wherever you heard that from.  Ignore from now on!

Kim_13

PaulDesmond said:

Can someone tell me if  will incure any taxes after I have completed a 1 year fixed term ISA. I heard that when you withdraw from an ISA you are taxed. If after 1 year I may look again for another 1 year fixed ISA.

Thanks. Paul.

If you withdraw from an ISA, you are taxed on any interest that is then earned by that money, unless you have a tax free allowance available to cover it.  You are not charged any income tax on the withdrawal, as it is not income. The money in the ISA is capital and you already paid any income tax due on it when you earned it.

So, it’s usually best not to withdraw from an ISA unless you need to spend the money (then there will be no tax as you are spending it rather than re-depositing elsewhere.) You can use a new provider’s ISA transfer process to move your ISA to another one, without losing tax free status on the money. This doesn’t have to be a fix and you can transfer to a variable rate account with access if you wish.

clairec666

You don't get taxed when you withdraw from an ISA, but once that money has been removed then any future interest on it is taxable, i.e. if you put it in a non-ISA and it earns interest there.

The Castle Community Bank account you mentioned is not an ISA, the best one year fixed ISAs are a bit lower, up to 4.3% currently.

PaulDesmond

I would need to withdraw after 1 year and then re-invest in another 1 or 2 year fixed rate ISA.

What would hapen to it after the 1 year if it is left in. I would be getting 4.52% for this 1 year.

Ayr_Rage

NEVER WITHDRAW, ALWAYS TRANSFER.

If you want a new provider contact them to arrange the transfer.

If left it would normally roll over into an instant access ISA with a rubbish rate, the provider will advise of options just before maturity.

PaulDesmond

Okay thanks. Got it. There is one odd thing.

When I went to money facts and clicked on 1 year fixed ISA. There were 5 banks. Could I put £3k into one and 3 months later put £3k into another and so on as they are all diffrent companies? I can not put another £3k ino the same account.

eskbanker

PaulDesmond said:

When I went to money facts and clicked on 1 year fixed ISA. There were 5 banks. Could I put £3k into one and 3 months later put £3k into another and so on as they are all diffrent companies? I can not put another £3k ino the same account.

Yes, you can pay into as many ISAs as you wish, subject to the annual contribution cap of £20K.

PaulDesmond

THanks for your help. I can now go ahead.