Full ISA Guide Discussion Area

Lokolo

See the point in what? Transferring into a high interest savings account? Or having an ISA at all?

You will be taxed 40% if the money is not in an ISA, so unless you want to spend it, I would keep it in an ISA.

veronica46_2

:smileyhea
Help!
When i was married we bought me an ISA, now I am divorced I do not know what to do with it at all - apart from you should not cash it in.
I am not at all sure my current provider is giving me a good rate It is currently held as cash in a stocks and shares ISA. Is that bad / good?
I am complete novice here. My ex handled the money but was not so very good at it!
I am completely confused by what I should now do. Is it difficult to transfer between providers? What information will they need to transfer? I don't seem to have a certificate of ownership like you do with a PEP.
thank you

veronica46_2

Also i just read Beemer and I agree with him (in his confusion)... are we missing the point of the ISA? If we all get taxed in the end anyway?

Baldur

veronica46 wrote: »

Also i just read Beemer and I agree with him (in his confusion)... are we missing the point of the ISA? If we all get taxed in the end anyway?

The Cash ISA (both capital & interest) is tax free while in the ISA wrapper - as soon as it's withdrawn and placed into a taxable account, the interest earned in the non-ISA account will be taxable at your normal income tax rate.

veronica46_2

Thanks- I think Isort of got that. So the ISA is gradually earning interest which is non taxable and is added to the capital sum invested.
So when you take it out the tax man does not suddenly pounce on you as though you had been formerly wearing a cloak of tax-invisibility?
It is just that the sum if it goes into a building society the amount will then START to be taxed along with all your other dosh in there?
Sorry I am completely duh about all this! I sold my PEP last year before it fell too far and put the money into a savings account. I don't know if this was right or wrong. probably should have used my ISAallowance you will all say!:heartsmil
Groan.

XXV

Baldur

veronica46 wrote: »

It is just that the sum if it goes into a building society the amount will then START to be taxed along with all your other dosh in there?

Yes, that's the gist of it. Basically, as you say, putting the maximum (currently £3,600, previously £3,000) into a Cash ISA shelters that cash & interest from taxation. Those of us who have done so from the start of ISAs have significantly more than £35,000 in them.

RayWolfe

Veronica47, you presently have a bad proposition as far as tax is concerned. Tax IS deducted from cash in a stocks & shares ISA. You may be happy with this in current market conditions.
Read the ISA articles on this site (see top of page for links) then come back if you have some specific questions.

Little_Chicken

Now a dopey question from me.... I have 2 cash isas and am about to open another one. When I get interest added to my current two - it gets added straight to my isas- does this need to be taken from this year's £3600 allowance. ie. If I get £600 interest can I only out £3000 into my new ISA?

Thanks

Baldur

Little_Chicken wrote: »

Now a dopey question from me.... I have 2 cash isas and am about to open another one. When I get interest added to my current two - it gets added straight to my isas- does this need to be taken from this year's £3600 allowance. ie. If I get £600 interest can I only out £3000 into my new ISA?

No, your interest on previous years' funds is irrelevant, you have an allowance of £3,600 for this year (new money).

Little_Chicken

Thanks Baldur - i thought that was the case, but just wanted to check ;0)