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What are the tax benefits of an ISA?
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Although we cannot address your particular tax situation and the following may change with changes to the tax laws, generally:
       
  • Income generated from your ISA or PEP is free from further tax and does not have to be declared on your tax return
    [Since 6th April 2004 the tax credit of 10%, applicable to dividends from UK shares cannot be reclaimed by your an ISA or PEP]    
  • your ISA provider can claim a 20% tax credit on fixed interest payments from bonds*;    
  • all interest on cash component* is tax free;    
  • all capital gains are free of capital gains tax, however, losses made in an ISA cannot be offset against gains made outside an ISA.
* Interactive Investor does not offer a cash ISA.
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