Tax ISAs (and what is 'significant wealth'?)

JohnD said:
People who have a spare £20,000 to squirrel away each year, and people who have more than £100,000 tucked away, are significantly richer than most of the population.

You should be aware that most wealth in UK is held in real estate and in pension schemes. Obviously we should be taxing most of the wealth. But we don't. This is deliberate.

As we have seen all too clearly this week, the UK tax system has been designed to bear most heavily on the ordinary working man paying income tax and NI, and to give an easy ride to those who are richer.
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John you sound jealous of those who managed to work and save more than you. Like "they're the evil wealthy, tax them at a higher rate (than I pay) on what they've saved/earned."

Isas have historically been moderately unappealing. The rates are often lower than is available from non-isas. At the moment you can get 3% (easy access) but that's only one provider.
I've got bits and pieces of isas picked as they've come up with better rates, over years. They mostly tweak their rates so I tend to leave it where it is, as long as you swap to the latest offer in the same co when one issue expires, or you go to a crap rate. It's a pain to move money between isas and you aren't "covered" if you have more than 85k in any one. (Just had one want me to post them a sample of my signature - Eh? Er, well, ok...)

It depends how much interest you earn. 3% of 85k is only 2550 a year. Whether you pay tax on that depends what your income is, so if you're on a low income/ + pension it's not "simple".
I haven't looked to see if the proposed limit applies to S & S isas. I maxed out on those for years but not now, costs can be higher..

I transferred an a/c into "China" mid November when they were on about opening up from covid, Hardly any clairvoyance needed for that one. As of today it's up 20.2%. It's flattish now so am watching the news.
Makes up for some I have in an ignored global fund which has dropped 4% in the last months of my over-optimism.
On Dec 6 I mentioned Nickel. I bought 50k at ~1.40 and sold at 1.80 - missed the peak but did ok. Now it's 1.68. No predictions - I lose interest when I sell....
 
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Justin Passing said:
It depends how much interest you earn. 3% of 85k is only 2550 a year. Whether you pay tax on that depends what your income is, so if you're on a low income/ + pension it's not "simple".
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If it’s an ISA, you don’t pay any tax.
 
Mottie said:
If it’s an ISA, you don’t pay any tax.
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Sure but if you don't earn much interest you don't pay tax on it anyway. SOmething like a 5k limit depending on your earnings., It was something like that
 
Justin Passing said:
Sure but if you don't earn much interest you don't pay tax on it anyway. SOmething like a 5k limit depending on your earnings., It was something like that
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It doesn’t matter whether you have £10 or £250,000 in an ISA there’s no tax on the interest earned on them. That’s the whole point of them.
 
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I think thats the point - during the low interest era, people weren't investing in ISAs and therefore missing out on their tax free income. Now you could move those cr@ppy ISAs around for a better tax free return.

A cap is fairer to younger people than reducing the annual allowance.
 
Mottie said:
It doesn’t matter whether you have £10 or £250,000 in an ISA there’s no tax on the interest earned on them. That’s the whole point of them.
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I KNOW that you plonker! I'm saying you need significant income for it to make any difference.
 
From 6 April 2023, the amount of profit you can realise on your investments without incurring a CGT bill is in most cases set to fall from £12,300 to £6,000.

Plus this unless other rules change which appears to add other taxable income into the sums
www.gov.uk

Capital Gains Tax: what you pay it on, rates and allowances

What Capital Gains Tax (CGT) is, how to work it out, current CGT rates and how to pay
www.gov.uk www.gov.uk

:( A subject that interests me as we have a holiday home that we should have sold some years ago really. My wife and I may make a gain of about £70k each when it is sold taking us well out of basic tax rates. As retired neither of us have much of an income That for ~20 years of ownership and paying out running costs. Ok ~5k or so of maintainance can be used to offset tax but that's about it. It was initially bought via an inheritance. Cost ~£60k.
 
Justin Passing said:
I KNOW that you plonker! I'm saying you need significant income for it to make any difference.
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No need for rudeness. Still can’t understand the point you are trying to make. What is this £5k limit you are talking about and what bearing does it have on tax with regard to an ISA?
 
Mottie said:
No need for rudeness. Still can’t understand the point you are trying to make. What is this £5k limit you are talking about and what bearing does it have on tax with regard to an ISA?
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I'm saying an ISA may not be much use to you. I already told you I use Stocks & Shares ISAs so obvs I know what they're for, yes?
For savings -
Er, look it up?
Apart from your personal allowance, you can earn 5k in interest tax free, Unless you have "other income".

Without any ISA.
So if you have 200k, which would score on the wealthy scale, at 2.5% - no tax.
 
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