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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a salary of £50,000 per annum and pay tax through PAYE.

Resolved Question:

I have a salary of £50,000 per annum and pay tax through PAYE. From the salary I pay £500 per month into a pension fund (in addition to the employer contribution) and, on an ongoing basis, around £2,000 through DD and SO to charities.
Because I am wanting to access £7,000 swiftly to clear a credit card bill, I am considering closing an ISA account which contains just over £12,000 at present. Were I to wait until September I could take out part of the money without closing the ISA; however, on the face of it, the saving in terms of maturation on 1.4% interest is negligible by comparison to the interest on the credit card account. Therefore I plan to close it. However, before I do so I would like to know what the tax implication would be: would it lead to a significantly higher tax bill for the year 2015-16?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

Interest received on ISA's is tax free. When you close an ISA, you have access to the capital and earned interest. There are no tax implications in closing an ISA. Closure would not result in higher tax bill for year 2015-16 or any other tax year.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4794
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes

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