Scenario: "Tax year 1". I move shares from a dealing account into an ISA, via Bed & Share process, maximum investment of £20K. I believe the dividend proceeds are tax free in that tax year. "Tax year 2". I repeat the above process to Bed & Share a further £20K share value into the existing holding ISA. So the ISA has doubled in overall asset value as there are 2 tax years' worth of ISA allowance now, but numbers of shares moved to ISA per tax year are fully documented. Looking at this from the perspective of "Tax Year 2" coming to an end, and all dividends have been paid for that tax year - am I correct in assuming: -Dividend proceeds from "Tax year 2" are tax free, subject to the annual ISA limit of £20K. -Dividend proceeds from shares *previously* placed into the ISA during "Tax Year 1" would now be seen as outside my ISA allowance and subject to normal allowance and tax rate?