if the value of the shares i have in my stocks and shares ISA go over £20,000, will that be a problem? for example, if i put £10,000 into my ISA and invest it all, then my investments appreciated to any value well beyond £20,000, would I no longer be able to cash them in and withdraw them tax-free?
is the limit only referring to how much money i transfer from my bank account into the ISA each tax year, and does it also include the value of stocks that i liquidate and take out? could i put in £20,000 or less into the ISA in a tax year and withdraw £100,000 worth of liquidated stocks tax-free that same year?
It’s money paid in can’t be more than 20,000, gains are tax free, so transferring in 10k to an ISA, growing it to 100k and withdrawing it all shouldn’t give you a tax liability.
Thats the advantage of a tax wrapper
As I’m aware any interest you make in ISA for example you invest 10k and are lucky enough to make 20k 50kor 100k?
I do not think you pay tax on it? not sure if there’s a limit
Any tax implications would be if you was to invest anymore over the initial allowance of 20k per tax year!
Sure FT told me that but clarification would be nice on here or professional
Any usual excellent advisors in this chat?
@Big-g or @NeilB or @PeteL mayb help
Ye up to £20k a year can be added and any gains are pure profit tax wise hence the term “tax wrapper” I think in the US they have a similar scheme and someone, Buffet maybe but can’t remember, has millions in their account from huge gains.
Edit - Found the link but this scheme is retirement I think but same tax wrapper idea as an ISA.
thank you for the replies everyone! glad to know I can grow my investments to any value and take them out tax free as long as i dont transfer in more than 20k.
another question is, if i sell a share, does the value of that sold share contribute to the ISA limit? e.g. i have added 15k to my ISA and I sell some stock worth 10k from that ISA, does that mean i’m now 5k over my annual limit? could i liquidate a stock from an ISA and reinvest that same money into another stock without contributing to the limit? i.e. am i only limited by the amount of money i transfer into the ISA from an outside source? can i invist 20k+ into stock if that money’s already in the ISA?
thanks again everyone.
You can only add 20k a year “new funds” and it won’t let you do more. Any other money from sell or dividends etc is all locked in the tax wrapper and not part of the 20k
On your ISA page it shows how much you have added but it is only new cash from your bank that effect it.
No. Think of it as you can only add up to £20k of new money into the ISA from an external non-ISA source each year ( direct transfers from other ISAs you may hold don’t count )
Think of your ISA as a ring fenced pool where you’re only allowed to put £20k a year in and you’re free to make (or loose) as much as can. It’s all yours with Rishi touching any of it.
ISA’a are loved by middle England, they won’t be able to raid them. He’ll just stop increasing the limits.
Someones got to pay for his new pool, gym and tennis court
Father in law Narayan Murthy should be good for an early Christmas present, he’s worth over $3bn
thank you all! very helpful!
All gains within the ISA are free from income tax and capital gains tax upon withdrawal, whether that’s a regular income or lump sum withdrawal. That’s how there are ISA millionaires out there. One thing to keep in mind is inheritance tax, as an ISA loses its tax free status on death and forms part of your estate, unless passed to a spouse under the one off permitted subscription rules assuming your provider accepts this.
But I plan on living forever, so that’s ok…