ISA Questions

[Narcisus]

I think i'm there !

I intended to stick 20k in an ISA and have the interest paid monthly but I now see there is no point in doing that as the interest would then be subject to tax ?

So to confirm if I open an ISA and put in 20k with the interest paid back into the ISA the interest generated is not included and wont break the yearly 20k limit ?

I can then add 20k a year making sure with interest I dont break the FSCS limit of 85k

Is it possible to have a joint ISA and put 40k in that would then be protected upto 170k ?

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

When the time comes to cash in the ISA I can then move all the money tax free to wherever I want ?

Cheers !

[Freakuk]

Narcisus said:

I think i'm there !

I intended to stick 20k in an ISA and have the interest paid monthly but I now see there is no point in doing that as the interest would then be subject to tax ?

So to confirm if I open an ISA and put in 20k with the interest paid back into the ISA the interest generated is not included and wont break the yearly 20k limit ?

I can then add 20k a year making sure with interest I dont break the FSCS limit of 85k

Is it possible to have a joint ISA and put 40k in that would then be protected upto 170k ?

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

When the time comes to cash in the ISA I can then move all the money tax free to wherever I want ?

Cheers !

I cannot answer all of these but hopefully a few from my own experience.

So to confirm if I open an ISA and put in 20k with the interest paid back into the ISA the interest generated is not included and wont break the yearly 20k limit ?

You just bung 20K in and the interest doesn't affect the limit.

Is it possible to have a joint ISA and put 40k in that would then be protected upto 170k ?

No, you can only have a single ISA per person, there's nothing to stop you and your wife (for example) having an ISA and both chucking up to 20K per year in.

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

As far as I understand this, it shouldn't be an issue, correct.

[bitchstewie]

Main thing is keep the interest so it's paid back into the ISA so it's inside the ISA wrapper.

That way you'll never (unless ISA rules change) be taxed on it even if you withdraw it.

If they pay the interest on the ISA into a non-ISA account (do they even do that?!) then as you say I assume it's just treated as interest so subject to tax.

[OldSkoolRS]

Narcisus said:

I think i'm there !

I intended to stick 20k in an ISA and have the interest paid monthly but I now see there is no point in doing that as the interest would then be subject to tax ?

Have you got a source for this? That's what I do with one ISA that I've rolled previous years into and receive the interest monthly. This year's one I've left in the account until maturity, when I'll probably just move it into another ISA next tax year.

[Narcisus]

OldSkoolRS said:

Have you got a source for this? That's what I do with one ISA that I've rolled previous years into and receive the interest monthly. This year's one I've left in the account until maturity, when I'll probably just move it into another ISA next tax year.

Sorry the source is just me around the internet thanks so far guys !

[supersport]

Narcisus said:

I think i'm there !

I intended to stick 20k in an ISA and have the interest paid monthly but I now see there is no point in doing that as the interest would then be subject to tax ?

I suspect this is only an option if it's a fixed term so you can't withdraw any

So to confirm if I open an ISA and put in 20k with the interest paid back into the ISA the interest generated is not included and wont break the yearly 20k limit ?

Yes, if the interest is in the ISA it stays tax free

I can then add 20k a year making sure with interest I dont break the FSCS limit of 85k
Yes

Is it possible to have a joint ISA and put 40k in that would then be protected upto 170k ?

No, no such things a joint ISA it's linked to your NI number, but nothing to stop you having one each.

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

A partial transfer to another ISA if allowed, should be ok. If you are just withdrawing it and putting it into another one, then it will count towards your limit.

When the time comes to cash in the ISA I can then move all the money tax free to wherever I want ?
Yes, that's the point.

Cheers !

Answered in line.

[Narcisus]

supersport said:

Narcisus said:

I think i'm there !

I intended to stick 20k in an ISA and have the interest paid monthly but I now see there is no point in doing that as the interest would then be subject to tax ?

I suspect this is only an option if it's a fixed term so you can't withdraw any

So to confirm if I open an ISA and put in 20k with the interest paid back into the ISA the interest generated is not included and wont break the yearly 20k limit ?

Yes, if the interest is in the ISA it stays tax free

I can then add 20k a year making sure with interest I dont break the FSCS limit of 85k
Yes

Is it possible to have a joint ISA and put 40k in that would then be protected upto 170k ?

No, no such things a joint ISA it's linked to your NI number, but nothing to stop you having one each.

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

A partial transfer to another ISA if allowed, should be ok. If you are just withdrawing it and putting it into another one, then it will count towards your limit.

When the time comes to cash in the ISA I can then move all the money tax free to wherever I want ?
Yes, that's the point.

Cheers !

Answered in line.

Thanks !

Going back to this one then :

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

At the end of year 2 when I have 40k in is it not possible to move the whole 40k to a new ISA if the interest rate is better ?

Do I just have to withdraw the whole lot and start again at 20k with a new ISA ?

[OldSkoolRS]

Narcisus said:

Sorry the source is just me around the internet thanks so far guys !

It's OK, panic over: I get that you might pay tax on the interest on the interest if you put it into a regular savings account. In my case I use that monthly interest as income, so it's spent rather than adding to any savings as such.

[leef44]

OldSkoolRS said:

Narcisus said:

Sorry the source is just me around the internet thanks so far guys !

It's OK, panic over: I get that you might pay tax on the interest on the interest if you put it into a regular savings account. In my case I use that monthly interest as income, so it's spent rather than adding to any savings as such.

Yep you're safe. You've just used money which was invested in an ISA. There's no tax on that.

[supersport]

Narcisus said:

supersport said:

Narcisus said:

I think i'm there !

I intended to stick 20k in an ISA and have the interest paid monthly but I now see there is no point in doing that as the interest would then be subject to tax ?

I suspect this is only an option if it's a fixed term so you can't withdraw any

So to confirm if I open an ISA and put in 20k with the interest paid back into the ISA the interest generated is not included and wont break the yearly 20k limit ?

Yes, if the interest is in the ISA it stays tax free

I can then add 20k a year making sure with interest I dont break the FSCS limit of 85k
Yes

Is it possible to have a joint ISA and put 40k in that would then be protected upto 170k ?

No, no such things a joint ISA it's linked to your NI number, but nothing to stop you having one each.

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

A partial transfer to another ISA if allowed, should be ok. If you are just withdrawing it and putting it into another one, then it will count towards your limit.

When the time comes to cash in the ISA I can then move all the money tax free to wherever I want ?
Yes, that's the point.

Cheers !

Answered in line.

Thanks !

Going back to this one then :

If the ISA has a fixed interest rate for a year and I have over 20k in there is it possible to move the money to an account with more favourable interest rates and if so will that count towards my yearly limit ? I'm guessing not ?

At the end of year 2 when I have 40k in is it not possible to move the whole 40k to a new ISA if the interest rate is better ?

Do I just have to withdraw the whole lot and start again at 20k with a new ISA ?

If you are transferring the whole lot to a new ISA then that doesn't count towards your allowance.

[98elise]

There is no tax to pay on any interest (or capital gains) in an ISA.

If you deposit 20k this year any interest is tax free, and can keep compounding tax free.

If a few years down the line you want to move the ISA to another provider you can and its original tax free stats stays, ie its not counted towards that years ISA.

You can just keep adding 20k in each tax year and it's not affected by what's happening with the previous 20k.

That's under current rules. We will shortly have a new government so things may change.

[Narcisus]

Perfect thanks all !

[snuffy]

I think the OP's original confusion is around the 20k yearly limit.

The 20k limit only applies to what you pay in per year, it's not a limit as to what can subsequently be held in it.