About dividends tax on isa?

When starting my stocks and shares ISA is it best to wait till the official new tax years or just start straightway?

Also if I where to buy stocks/shares in an American company i.e amazon,apple etc… will I need to pay dividends tax on them even if its in an ISA.

Thankyou for your time sorry if I sound dumb or silly but I believe if you don’t ask questions you won’t learn anything.

Appreciate anyones help.

Its best to use this years allowance.

Consider you put in 20k a year every year for 10 years. The 20k you put in this year you can’t just add to another years contribution if you don’t use the allowance this year. The allowances don’t roll-over. The 20k you put in this year will give you 10 years of tax free investing. You aren’t therefore simply losing a one-time contribution. You are losing those funds in your isa for every subsequent year.

Yes if you invest in a US company you may have withholding tax. However, that said many of those companies pay little or no dividend so it isn’t that significant an issue. In any event it will be free of UK tax.

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Ok thankyou for your answer I appreciate it. What if i only put in 1k this month and then wait till april will i have the 20k allowance reset. Sorry if I sound stupid its Just kinda confusing me.

As I have my isa in my bank which I still wanna contribute too.


What if I don’t put In 20k and I just wanna contribute £250 or less another is that still ok as long as I don’t go over the 20k limit?

In general I would say put money in the ISA. You can always withdraw it later if needed. At present you can only contribute to one share isa in each tax year so bear this in mind (I think that restriction will be removed in the next tax year).

If you put in some money now at least you can use it within the isa wrapper during the remainder of this tax year and if you are in a position to contribute the full 20k in the next tax year putting a little in now will increase your total.

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Thank-you, appreciate all your help.

I will post more questions if I require help as here seems alot of people can help

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@WakeMeUp so if i put 1k in my stocks and shares ISA next week 1st March for example, and 1k in my ISA bonus saver(with halifax) before the end of the tax year what will happen in April does it reset? Or can i still be contributing towards it thanks in advance

Yes every tax year you get a new £20k allowance. It doesn’t roll-over so any portion of this year’s allowance you cannot carry over to next year.

At present you can (I believe) contribute to both a cash isa and a shares isa in the same tax year but you cannot contribute to two different shares isas. The maximum you can contribute to all ISA is 20k in any tax year.

You can put max 4k into a LISA in any year which will be part of the 20k. So if you put 4k into a LISA you can only put 16k into your other ISAs in that year.

I am not sure what you mean by this. If you put money into your ISAs in March the money will be safe inside your ISA in April and you will get a new 20k allowance. The 20k limit is across all of your ISA. Thus if you put 2k into a cash ISA, you will only be able to put 18k into the shares ISA

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Ok I kinda understand now, when the next one starts I will only have 18k left to use until the next one?


No if the 2k has been put in during March that was during the 23/24 tax year so on 5 April you get a completely new 20k so you can put 20k in giving you 22k saved in total. Then after 5 April 2025 you get another 20k allowance so if you put another 20k into your ISA in May 2025 you’ve then got 42k…

Ohhh, now i understand thankyou very much it was just so confusing and I appreciate all your help with my questions

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@WakeMeUp also I’m looking at shares and for example they have “British American tobacco” in there already but can I still have that on it owns while it’s in the iShare too?

Thankyou for your time

Hi. Sorry I don’t understand the question.

I am assuming that you are fairly new to investing. You are welcome to ask as many questions as you want because there are plenty of people who are happy to help. I would suggest that you look at some tutorials or perhaps read a book. I haven’t looked at them myself but T212 have some video tutorials and I’d imagine they are pretty good.

I don’t understand:

I am guessing that you are looking at funds/EFT such as iShares. To take a step back and explain a little (perhaps telling you what you already know).

You have a company and you can buy shares in the company. So you could buy shares in Google or BP or HSBC… However, there are various types of investment fund and you can buy shares in the investment funds. I say “funds” but there are a whole range of different forms - funds, trusts, EFT… I don’t invest in funds very much so other people can explain more about the differences between different forms of fund but just trying to keep it simple.

So simple - you can have a firm who consider themselves experts in a particular market so they can put together a fund XYZ and they sell shares in XYZ. XYZ will have lots of investment money and they will invest in companies they like. Thus they may invest in 30 different companies. Thus if you buy a share in XYZ you indirectly get a share of all the 30 companies that XYZ has invested in. The benefit is that the managers of XYZ will be actively managing the investments so you are getting the benefit of their “expertise”.

There are funds that are focused on specific geographic areas (ie the US, far east, UK, Europe). Thus a UK fund will have a manager(s) who invests the funds money into UK companies. You can also have funds that focus on types of company - tech, small cap, growth, income…

You can also have funds (EFTs) that will track markets - eg the FTSE100 or Nasdaq… So a fund that tracks the FTSE100 will be very roughly equivalent to owning a small share in each of the 100 companies in the FTSE100.

So back to what I think you were asking. If there is a fund/EFT that owns some British American Tabacco you can buy shares in the fund and you are free to also buy shares in the individual companies as well. Another example might be that I buy a tech fund but really like Nvidia so I buy shares in the tech EFT and also buy shares in NVDA.

The advantage of funds is that in they should reduce your investment risk. You are basically spreading your investment across lots of companies either buy buying a tracker fund or an actively managed fund.

I hope this makes sense and answers your question

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Just to give another explanation (I know things can be confusing to start with). Hopefully this explanation makes sense and doesn’t increase the confusion.

Think about going to your favourite supermarket to get some fruit salad. Two options. Get their ready made fruit salad that has 6 different fruits all prepared and mixed. Alternatively you can buy some oranges, apples… and make your own.

That’s the same as investing. You can buy the individual companies (Google, BP, Natwest…) or you can buy a fund that gives you some sort of mix of companies and you have a thousand choices of fund each containing a different mix of companies.

Just like the fruit salad analogy, you can go to the supermarket and buy a pack of ready made fruit salad and you can buy your own fruit as well but you can buy 2 oranges, 6 banana, 1 apple… So yes you can buy shares in a fund/EFT AND buy shares in individual companies and you can put more into one company that another (so you could invest £100 in Google and £50 in Natwest)…


@WakeMeUp thankyou, makes alot more sense now


As for dividends from U.S. stocks like Amazon or Apple within an ISA, one of the great benefits of the ISA is its tax-efficient wrapper. This means any dividends you receive from these stocks within your ISA are not subject to UK dividends tax. However, it’s important to be aware of the U.S. withholding tax on dividends, but the good news is that due to the UK-US tax treaty, the rate is reduced for UK investors, and being within an ISA, you’re shielded from further UK taxes on those dividends.