Soldato
Probably an AI written article.
Best savings account?
- Thread starter Merlin5
- Start date
Associate
The Halifax ISA team informed me that any interest transferred out of the ISA becomes taxable once it leaves the ISA account. I wanted the interest to be paid into my current account to cover bills, and this is when they advised me of this.
Associate
Correct, but I requested the interest to be transferred out monthly, which Halifax confirmed the interest would become taxable - I didn’t realise it became taxable at that point.
Earnings inside an isa are tax free and can be transferred out without paying tax, were you asking them to pay the interest directly to a different account? also why aren't you letting you isa compound
This seems to be your issue, you want a fixed rate but don't want to commit to locking it away. You need to pick one or the other. If you want immediate access to your money then you need to accept not getting the best rate.
Considering what's going on in the US economy, it sounds like they're about to anchor on the brakes as the high interest is stifling their economy, so I don't see interest rates going back up over 5% as the UK will likely follow suit.
Unless you're needing your 40k imminently, I would look at locking it away at the best fixed rate that's available today.
Why would you think it wouldn't be taxable at that point? It's no longer within the tax-free wrapper. You won't pay interest on the initial earnings from the ISA, but any future earnings from it would be subject to taxation. You should always have your interest from ISAs paid back into the account.
Soldato
Question about ISA and tax 
When your ISA matures,you transfer x amount into your no interest bank account,does that amount get taxed
Always used an accountant before i retired so no clue
When your ISA matures,you transfer x amount into your no interest bank account,does that amount get taxed
Always used an accountant before i retired so no clue
Soldato
Thanks
Associate
Looking for a savings account for my son, 4. Have around £1000 already in the halifax kids monthly saver that ends next month that will pay 5.50%. What are the best options?
Question about ISA and tax
When your ISA matures,you transfer x amount into your no interest bank account,does that amount get taxed
Always used an accountant before i retired so no clue
You also only get taxed on the interest earnings over £500/£1000 depending on the amount of tax you pay.
Sounds like Halifax still have one of the best rates, so maybe worth renewing.
Top children's savings accounts
Children's savings accounts are a great way to put money away for your kids and to help teach them money basics. Read our guide and see our top picks at Money Saving Expert
www.moneysavingexpert.com
Saffron BS have a slightly higher rate, but it's variable (so likely to drop over the coming months), and needs to be opened in branch or via post.
Frankly I'd just renew with the Halifax.
Junior SIPP, and Junior ISA or S&S ISA would be my vote.
Associate
I just didn’t realise, and no longer transfer the interest out.
Associate
I was as I didn’t realise however, I have since cancelled the request thus, the interest now remains in the isa wrap.Earnings inside an isa are tax free and can be transferred out without paying tax, were you asking them to pay the interest directly to a different account? also why aren't you letting you isa compound
Soldato
ISAs really aren't that hard.
Its a tax free wrapper, anything inside the wrapper is tax free. So if its cash or shares its tax free. You can ADD £20k a year as thats the allowance. You can leave whats in there within an ISA if you want and add another £20k (maximum) each tax year you choose to.
The interest unless you withdraw it sits within the ISA and hence is tax free. There is no differentiation on where the funds within an ISA come from, if its in its tax free.
The moment you take take money out of an ISA whether that is original capital or interest its just normal money, as if you earned it, inherited it, won it etc.
From that point in time it will be taxable if you earn interest on it, but as of the point of withdrawl from the ISA there is no tax due.
Its a tax free wrapper, anything inside the wrapper is tax free. So if its cash or shares its tax free. You can ADD £20k a year as thats the allowance. You can leave whats in there within an ISA if you want and add another £20k (maximum) each tax year you choose to.
The interest unless you withdraw it sits within the ISA and hence is tax free. There is no differentiation on where the funds within an ISA come from, if its in its tax free.
The moment you take take money out of an ISA whether that is original capital or interest its just normal money, as if you earned it, inherited it, won it etc.
From that point in time it will be taxable if you earn interest on it, but as of the point of withdrawl from the ISA there is no tax due.
Soldato
I retired about 5 years ago so am not earning/or on PAYG
Pension income still counts as income as far as tax is concerned.
Soldato
Not drawing pension yet got another 4 years for private and about another 7 years for state