1

Say at the end of year 1 I have a cash ISA with annual interest maxed out at £15,000 (I'm not certain of the exact maximum)

For that year, suppose I am paid tax free interest at 2% so my balance is now £15,300. Suppose over year 2 I then pay in a further £15,000.

My total balance is £30,300. My question is - what "part" of this total cash will interest be calculated on.

For example, will I get 2% interest only on the £15,000 I paid in over year 2? Or will I get paid interest at 2% on the whole £30,300, but have to pay tax on £15,300 of the total cash pot?

4

In the second year the £15,000 from the first year will still earn interest, and any new money you put in will also earn interest from the time you deposit it.

All the interest is tax free.

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