Dividends are taxed
with Stocks & Shares ISAs
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Last update : November 2011
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| It is a popular myth that all profits generated from investments held within ISAs are tax-free. Sadly this is not the case with income such as share dividends.
The taxman divides gains into two separate entities -
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- Income - usually from dividends
- Capital Gains - when the value of an investment increases
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With ISAs all Capital Gains are 100% tax-free but income is taxed, although at reduced rates. Dividend income within ISAs is taxed at a flat rate of 10% which is deducted at source (the company pays it on your behalf and then credits you the 90%).
To confuse things further income earned from Bonds, whether Government or Corporate, is classed as a capital gain.
See also
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FREE Stocks & Shares ISA Report
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Why you must think long term with ISAs
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Costs and charges - How to slash them
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The best broker to use - and why |
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How to build a Portfolio of different asset classes
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More details |
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Read more in the ISA section:
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