How much can I withdraw from ISA?

If I have invested let’s say 20k and the returns in total have gone past 20k. How much can I withdraw in a calendar year without paying any tax?

For another scenario where I have invested £20k in the first year and didn’t withdraw or add for another 4-5 years. After 5 years let’s say the amount in total with returns has become 100k. How much can I withdraw after 5 years without paying any tax? I have read somewhere that I can withdraw 12.5 per year without tax. Does it mean I can withdraw 62.5k after 5 years assuming I have not withdrawn any amount for 5 years? Or is it just 12.5 I can withdraw?

Please suggest. Appreciate your time.

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ISA withdrawals are not taxed. nor are profits made inside them.

as such if you filled your 20k quota for the year, and made 20k on top of that. you could withdraw 40k if you so wished and not pay anything for doing so.

however you would have to wait for the next tax year to contribute 20k again. you are depositing money that has already been taxed via source, income tax et cetera.

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You do not pay tax on any amount of money you earn in an ISA. You can withdraw as much as you like any time.

It must be said, every single day I learn something new in this community!! I didn’t know that about the ISA withdrawals not being taxed :slight_smile: thank you

@Cashurkash it gets mentioned rather frequently but I guess it’s easy to be misunderstood. It’s a special consideration made for UK residents on the basis that the money they would be putting away would have already been charged taxes before it arrived in their banks. so ISA’s look to prevent double taxation of that money so people would be more willing to not just spend it.

I believe there is a different kind of savings account that delays income tax until it comes time for you to withdraw it and then does so at income rates. I think this is in relation to retirement accounts but I haven’t looked into it in enough detail to be sure. these go under different names depending on the country and are usually what you see in place of ISA’s.

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Yeah it’s mentioned often but never been in my field of thoughts for reading or being interested in reading but, I’m beginning to read more titles now that I would have passed previously. Tax isn’t my strongest point but it’s something I need to get a hold of :slight_smile: