What are the tax benefits of investing within an ISA?

Whilst we cannot offer tax advice, ISAs are considered to be tax efficient accounts.

With a cash ISA, interest earned is not subject to income tax.

With a stocks and shares ISA, you pay no Capital Gains Tax on profits realised within the account: equally you cannot offset losses in an ISA against other gains.

Dividend Withholding Tax deducted at source cannot be reclaimed, but you are not liable for further income tax on dividend income. However you still have to pay stamp duty / stamp duty reserve tax on purchases.

Income and capital gains in ISAs do not need to be included on your tax return.

- Submitted on 29th Feb 2020

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