ISA - Reporting/Paying Tax

[Nowler]

Hi all,

How tedious is it to report income from an ISA many years later?

As in, if I am buying and selling from within my ISA for years, with no money coming out, but then decided 10 years later to take money out, do I simply just report that I earned X amount from a Stocks and Shares ISA this tax year?

Or do I have to report when I bought and sold each one, and what profit was made from each trasaction?

I literally have zero experience in reporting tax! lol
My income is taxed at source from my employer

 

[MasterOfCoin]

Hi all,

How tedious is it to report income from an ISA many years later?

As in, if I am buying and selling from within my ISA for years, with no money coming out, but then decided 10 years later to take money out, do I simply just report that I earned X amount from a Stocks and Shares ISA this tax year?

Or do I have to report when I bought and sold each one, and what profit was made from each trasaction?

I literally have zero experience in reporting tax! lol
My income is taxed at source from my employer

As long as you've not breached any ISA funding limits, and not breached more than the 1 Million lifetime limit after gains, there's nothing at all to report.

ISA's are free of all Income / Capital Gains Taxes within those criteria.

Rest assured, your ISA provider reports every penny to the Tax Authority annually anyway, it's a condition of their continuing to provide the product, but there's no requirement on holders to report gains held in ISA's.

 

[Nowler]

As long as you've not breached any ISA funding limits, and not breached more than the 1 Million lifetime limit after gains, there's nothing at all to report.

ISA's are free of all Income / Capital Gains Taxes within those criteria.

Rest assured, your ISA provider reports every penny to the Tax Authority annually anyway, it's a condition of their continuing to provide the product, but there's no requirement on holders to report gains held in ISA's.

But I do have to pay Income/CGT when I take it out of the ISA.

So do I merely report the nominal amount withdrawn from the ISA?

 

[BigDeal]

No, if the income and or profits were generated inside the ISA no declaration or reporting of such is required

 

[MasterOfCoin]

But I do have to pay Income/CGT when I take it out of the ISA.

So do I merely report the nominal amount withdrawn from the ISA?

Nope.

There is no reporting requirement for withdrawals and no Tax to pay.

Take out and spend gains tax free.

What you can't do, is recycle more than the annual limit back into the ISA, unless it's a 'Flexible ISA'.

That'll breach the conditions and leave you liable for a Tax Bill !

 

[Nowler]

No, if the income and or profits were generated inside the ISA no declaration or reporting of such is required

Nope.

There is no reporting requirement for withdrawals and no Tax to pay.

Take out and spend gains tax free.

What you can't do, is recycle more than the annual limit back into the ISA, unless it's a 'Flexible ISA'.

That'll breach the conditions and leave you liable for a Tax Bill !

WHAAAAAT!
You're joking me!?!

I loved ISA's when I believed it was merely a tax deferral wrapper - i.e. that you don't pay tax until it leaves the ISA.
Now I'm being told that the only tax I pay on money I take out of my Stocks & Shares ISA is the tax on the items I am purchasing with that money...

Someone hold me up!

 

[MasterOfCoin]

Yup.

It's a Tax Avoidance Wrapper endorsed by the State.

Enjoy, as such things are rare, - usually they involve giving your money to the State for a poorer but safe return.

 

[Nowler]

I had been factoring in like ... 40% tax into my ISA future.

Though at the rate that money is being printed, ISA's might very well be taxed when you take the money out, lol

 

[Nowler]

Do profits realised inside an ISA count as income?

For example:
If I am a basic rate tax payer and I realise 50k inside an ISA...

If I realise another 20K (which on its own would not push me into a higher bracket) from stocks outside of an ISA, do I pay the CGT as a basic rate tax payer, or a higher rate tax payer?

 

[mpups]

Do profits realised inside an ISA count as income?

For example:
If I am a basic rate tax payer and I realise 50k inside an ISA...

If I realise another 20K (which on its own would not push me into a higher bracket) from stocks outside of an ISA, do I pay the CGT as a basic rate tax payer, or a higher rate tax payer?

the ISA monies are exempt from all tax mate, tax bracket doesn't matter

 

[MasterOfCoin]

Do profits realised inside an ISA count as income?

For example:
If I am a basic rate tax payer and I realise 50k inside an ISA...

No, they don't. It's not income. It don't count.
Tax exempt, subject to million quid limit previously noted.
😁

If I realise another 20K (which on its own would not push me into a higher bracket) from stocks outside of an ISA, do I pay the CGT as a basic rate tax payer, or a higher rate tax payer?

@ Basic Rate CGT, on amount above annual exempt allowance.
As the ISA gains are not counted as income in calculating your liability.

These rules are, generally, written into law after careful consideration to the needs of allowing the corrupt filthy rich and especially those writing the actual tax laws, to pay far less tax than the illegal asylum seeking immigrants they employ @ default tax rates, to clean their toilets or, for that matter, any of the feeble minded constituents that voted them into office and the power to draft said laws.

Poor people work and pay tax. Rich people don't and spend it.

That's how the world works, and always has done.

In the main, because, generally, it's the rich people or their puppets, writing the laws.

 

[Nowler]

Yeah, I know that gains from my ISA see no tax deduction - I was just trying to figure out whether it still eats up my Income & CGT allowance, therefore absolutely finger blasting me on the hypothetical 20K stock gains made outside of an ISA.

Thanks for answering.

Obviously I want to be like the rich and avoid paying more tax than I have to too
I was concerned that my gains outside the ISA were going to be higher due to my allowance being eaten up by the ISA gains, even if the ISA itself isn't taxed.

I wonder who and how much I have to pay to get a law written so that CGT isn't a factor until you withdraw the money from the brokerage account and deposit into a bank

With a bit of luck, the time to start selling my shares falls around March/April time so I can do it over 2 tax years

 

[MasterOfCoin]

Yeah, I know that gains from my ISA see no tax deduction - I was just trying to figure out whether it still eats up my Income & CGT allowance, therefore absolutely finger blasting me on the hypothetical 20K stock gains made outside of an ISA.

Thanks for answering.

Obviously I want to be like the rich and avoid paying more tax than I have to too
I was concerned that my gains outside the ISA were going to be higher due to my allowance being eaten up by the ISA gains, even if the ISA itself isn't taxed.

I wonder who and how much I have to pay to get a law written so that CGT isn't a factor until you withdraw the money from the brokerage account and deposit into a bank

With a bit of luck, the time to start selling my shares falls around March/April time so I can do it over 2 tax years

I wonder who and how much I have to pay to get a law written so that CGT isn't a factor until you withdraw the money from the brokerage account and deposit into a bank

That'd be covered by 'filthy rich law No 2a' ....
Take profits made in more shares.
Borrow cash against the collateral of the shares held as security.
Spend borrowed tax-free cash- it's not 'income', it's a loan.
Deduct loan interest payments off any other tax liability.
Result= taxpayers fund super-yacht.