How does this work, if I had no job but had savings in a Isa that gains interest at the end of said year I've had no income so nothing to tax right?

[Kaneki05]

Isa don't get taxed right? I am gonna guess they find a way to tax you somehow otherwise I think I found myself a plan.

As I can live on my Pip money, which is not classed as income. I know my universal credit would stop, but that wouldn't matter in the long run if those savings to gain so much interest without been able to get taxed.

Updates

1 y

The best part is even if the Government somehow classed the interest as income, I would need to make 12,570 in a year before it's enough income to be taxable anyway. Which for that I would need a 1/4 of a Million in my bank anyway, since that roughly equates to 12k interest per year.
Which ya know I wouldn't have to worry about for years using this tactic and by the time I am there I won't care if they do or not.

[Anonymous]

That's right. ISA income can capital gains is not taxed. You can either take it out and spend it or leave it in there to continue to grow tax free. If you have any money outside the ISA you should spend that FIRST before you take money out of your ISA.

[Kaneki05]

Yeah the plan would be to use all my Pip money every month or withdraw it from my bank before the months end so I have no money left.
And the only money I have is saved in my Isa really which I plan to never touch so in 30 years I could consider myself rich.
This is also getting away without working a single day in my life.

[Opinion Owner]

Nicely done! How much do you spend each month and what's your ISA balance?

[Kaneki05]

Well I need to start it but I have money saved up in a normal savings account, and if this does work for the best still need to figure it out. Will put my Benefits and savings into one. Until the point they cut me off from benefits from having to much savings. 300 a month put into their for at around 2 years.
My pip is basically 750 a month, I can live on that pretty easily assuming nothing changes.

If I kept it in my normal savings they would tax me on it after the benefits gets cut off. Though I need to do math's because perhaps I am been dumb, and that tax wouldn't matter and normal savings would still earn me more despite been taxed upon it.

[Opinion Owner]

I'm not sure why normal savings would earn more than what you can earn in the ISA. You should be able to hold shares or gilts in the ISA, no?

[Kaneki05]

Ah my bad I was under the impression ISA's had a low interest rate. Turns out it's not much different. And there is multiple types of ISA's like Stock or Cash so gotta learn upon that to.
Wish I started thinking about this years ago but it is what it is and now is better than later.

[Opinion Owner]

Yeah--an ISA is nothing more than an account type. In this case an account within which you don't need to pay any dividend or capital gains taxes. However, within that account you can invest in a lot of different instruments. If you can manage to see gains, they aren't taxed which is great. If you don't need to take money out for awhile, it has longer to grow. So it's always best to stock up your ISA with as much as you can and to spend any other money BEFORE taken any withdrawals from the ISA.

[Kaneki05]

Sad thing is though even if ISA is not taxable, if I have over a certain amount saved within it they would slow to even stop my benefits if I go over 16,000 in savings.
Roughly with 16,000 in savings let's say 5% interest it would take 4 years to get the same amount I would get from benefits in one year. And that would be 4 without benefits.
Which is doable thanks to my Pip but not getting those benefits for 4 years is of course a loss. And even after that I have to keep my money in there just so I can keep it going up.

It makes sense and stops people I suppose doing this tactic to get enough interest that benefits and working don't matter within a year or two but realistically only people with Pip for disability would be able to do this anyway. Wish the cap was higher for saving but it is what it is.
So really gotta go over whether it's worth it or not.

[Opinion Owner]

Unless they withdraw benefits faster than you accumulate wealth, it makes sense to keep it in the ISA. If they withdraw faster than you build wealth, then you should with draw just enough to stay under the limit and stuff it under your mattress.

[Kaneki05]

Yup just what I was thinking get up to 16,000 nearly then just start withdrawing any further payments. Gotta get there first before worrying about it who knows they may upper the cap limit of how much one can save on day or maybe lower it I hope not. But once I get to the amount, I'll figure it out from there.
Think the exact amount I could have so interest don't go above 16,000 from a year is 15,250 after finding an ISA that gives 5.2% interest, since that gives me £15,956.85 just under that number.

[goaded]

Pretty sure there's a (low) limit to the amount of interest you can get from a ISA (or the amount you can have in one, which amounts to the same thing).

[Kaneki05]

It's low for sure but if it amounts to no tax then it can build up for many years.
But maybe it's fine been taxed on a 5% interest though I've never been taxed before and dunno how much that would equate to losing every year compared.

[Kaneki05]

Actually just found out by doing more research ISA's aren't low at all really. It's not much different. The only big difference is that limit of 20K in there but that's not a problem as that's refresh limit. And I don't plan to put in 20K every year, I wouldn't be getting any income to do that much anyway.

[DrPepper12]

You have this tank confused. Details please

[Kaneki05]

Pip is given to anyone with disabilities it is not effected by tax therefore not classed as income. Well longs if ya spend it which I will to live.

Isa accounts aren't taxable by law they are a savings account that can only get 20k a year put in but can't be taxed though interest still goes up.

So what income would I actually have that the government could tax me on?

[DrPepper12]

I guess none

[Kaneki05]

If true I found a good money glitch for myself and it make take years up on years but I could be what I consider rich by 40s.

[thisAppIsGarbage]

Wrong. That's income. If it's more than the standard deduction you will owe tax

[Kaneki05]

Isa is not taxable though. And nethier is pip. So where's the income that's taxable?

[thisAppIsGarbage]

Indont know what commie country you live in or what pip or Isa is if it's a gain you owe taxes in America.

[Kaneki05]

It's so funny how you are the only one saying it's taxable yet everyone else say's it ain't including the government it's self.
Go look up what an ISA is and get educated lol.

[thisAppIsGarbage]

I'm a tax accountant with 2p year experience. I'm sure it won't matter because anyone so dumb won't make enough money to warrant a tax audit.

[Kaneki05]

A tax accountant who don't know what an ISA is that's funny.
'You can save tax-free with Individual Savings Accounts (ISAs).'
This is the UK official Gov site saying this, and America ISA's work the same along with several other countries.
https://www.gov.uk/individual-savings-accounts

[thisAppIsGarbage]

Are you a bot?

[Kaneki05]

Yep you got me wow your so smart, what a big brain you have lol.

[goaded]

Dudes, UK law, not US law!

[Kaneki05]

@goaded Does America not have Tax-free ISA's?
If so just another reason why I wouldn't live there lol.

[thisAppIsGarbage]

Good. We don't want you here. More than 60% of Americans pay no tax. Most European poor pay 60% of the tax. That's why people risk their life coming to America and Russia is about to whipe Europe off the map. Lol

[Kaneki05]

Funny how you flipped your argument, was that a mistake?
Think you meant 60% of Americans pay Tax not they don't. Which is actually about the same. As 43% don't pay tax in UK which ya know is just next to 60% that do.
So don't see how this is a point at all.
But hey they will always be weird people that get defensive when they secretly envious of what others have, pretty sure most Americans would love to have a Tax-free savings account as most people want more money.

And no the only people who risk theirs's lives coming to America are Mexicans because your right next door and Mexico standards is really bad so not a good standard to be boastful about.

[thisAppIsGarbage]

No I didn't flip shit. 60% of Americans pay no tax. Fuck 10% of the poorest get paid for having kids and low incomes.

[Kaneki05]

All I can say to that one is "In total, about 59.9 percent of U. S. households paid income tax" didn't take long to do one simple search to find out that 60% of americans do pay tax lol.