Does interest earned from cash
held within a Stocks & Shares ISA get taxed
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Last update : November 2011
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| Yes, the taxman will deduct 20% of any interest generated from cash held within a Stocks & Shares ISA.
Also the Inland Revenue does not approve of large cash balances held within Stocks & Shares ISAs. Plus, any interest you receive (from your ISA broker) will probably be something like 0.1%.
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| A way around this problem |
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The best way to handle a large cash balance held with a Stocks & Shares ISA is to use the Sterling Money market ETF (ticker XGBP). This invests in short-dated cash instruments that pay interest. It's like depositing money in a savings account but it's still viewed as a stock.
Look at the Google Finance chart and you'll see the price of the ETF only rises. The small dips you see are probably because of management fees (around 0.15% per year).
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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