Dividends within ISAs are no longer tax free as we know.

My Question Is does the 10% Divi deduction In an ISA (which Is classed as earned Income outside) also count as earned Income?

I will go to the IR If no won knows the answer, but thought I would ask on here First.

Thanks :-)

Most of the larger rises are news driven...

Apologies, I asked the question wrongly.

What I meant to have asked was:

Does a Dividend payed within the ISA count as earned Income just as It does when payed outside of an ISA?

Stan

If you are asking whether it is included within the income you declare , then no it doesnt - ie if you are 200 under the 40% threshold and you have 400 of divi income this does not take you into the higher rate band as it is is not included in your taxable income

If you mean earned income as in being eligible for pension contributions, I doubt it very much, but check with the IR.

Thanks chaps,

I think Fundamentalist has answered the question.

It is no point asking the IR because they don't know or care. They just pass you back to your broker.

All dividend is taxed at source. When Peps and Isas were introduced they were completely tax free, your broker could claim back tax paid on dividend.

Gordon Brown decided that he'd put a stop to this and now yes tax is paid on dividend in Peps.

The way the market is storming ahead it won't be long before he starts taxing capital gains in Peps and Isas