Am i missing something with ISA,s

excited

I dont understand how they are tax free for a basic rate tax payer.

As when you take your money out you pay tax. As Martin says when you move from ISA to ISA never take your money out, but do a transfer.

Could some explain how you get the money out when you need the cash without paying income tax.

Thanks in Advance.

tradetime

You don't pay tax when you take your money out, you simply lose the tax exemption on the money ie say you had £10,000 in an ISA took it out and then decided you didn't need the money, you cannot put the £10,000 back in, but have to feed it in at the yearly limit.

masonic

To summarise, interest you earn while the money is in the ISA is never taxed.

bristolleedsfan

excited wrote: »

I dont understand how they are tax free for a basic rate tax payer.

As when you take your money out you pay tax. As Martin says when you move from ISA to ISA never take your money out, but do a transfer.

Could some explain how you get the money out when you need the cash without paying income tax.

Thanks in Advance.

Even better explanations come from posting here.


http://forums.moneysavingexpert.com/forumdisplay.html?f=18