How to tell HMRC about interest earned

[BoldonLad]

Thanks. It's via NS&I so i guess they know the ins & outs of each others accounting.

What an optimist you are!

 

[Gunk]

£500 if a higher rate taxpayer

It’s a good idea, if you do earn money from investments or receive dividends to put everything in a partners name who doesn’t pay the higher rate of tax.

my accountant suggested this a few years ago and the advice has saved us £1000’s

 

[vickster]

It’s a good idea, if you do earn money from investments or receive dividends to put everything in a partners name who doesn’t pay the higher rate of tax.

my accountant suggested this a few years ago and the advice has saved us £1000’s

I don’t have a partner however

 

[bikingdad90]

It’s a good idea, if you do earn money from investments or receive dividends to put everything in a partners name who doesn’t pay the higher rate of tax.

my accountant suggested this a few years ago and the advice has saved us £1000’s

However, also consider your legal recourse position should the relationship goes sour as they’ll technically be in his/hers name as therefore you might not have access to some/all of the funds; often overlooked.

 

[Gunk]

However, also consider your legal recourse position should the relationship goes sour as they’ll technically be in his/hers name as therefore you might not have access to some/all of the funds; often overlooked.

20 years with Mrs Gunk so reasonably safe

 

[T4tomo]

I don’t have a partner however

I wouldn't get one just for the tax savings. I did that with Married couples allowance, then it got abolished and the divorce cost me way more than the tax savings

 

[vickster]

I wouldn't get one just for the tax savings. I did that with Married couples allowance, then it got abolished and the divorce cost me way more than the tax savings

I’m more than happy not to

 

[chris-suffolk]

As said it's all automated although you do need to declare anything outside the allowances on your SA if you complete one.

A couple of things to be aware of which may be of interest (unavoidable pun!)

If you invest in Fixed Rate Bonds be aware that unless the annual interest is Paid Away eg to your Bank a/c each year, then HMRC will assume that all interest earned across the full length of the Bond period will have been earned on the Bond maturity date - this may tip you into a tax liability situation. Cheeky little scheme by HMRC imo.

Secondly, the number of people I know who do not use all tax allowances available including non-working partners allowances is astonishing. Here:

ISA's are our primary investment vehicle - hopefully the tax-free status will never be removed!

Mrs SD transfers 10% of her Personal Allowance to me.

We use both £1000 Personal Savings allowances.

Mrs SD takes advantage of the £5000 Starting Rate for Savings 'mechanism'. This is often missed by many people. Needless to say, more of our FRB's are in Mrs SD's name than mine.

https://www.gov.uk/apply-tax-free-interest-on-savings

Quite!!.
With good use of ISA's, and using £5000 limits for earnings below the tax threshold + the £1000 allowance that we all get, we're getting £1000 a month in tax free interest. Happy with that.

 

[SpokeyDokey]

Quite!!.
With good use of ISA's, and using £5000 limits for earnings below the tax threshold + the £1000 allowance that we all get, we're getting £1000 a month in tax free interest. Happy with that.

We too get a very goodly amount tax free.

Sadly, we still have to pay tax on the excess 'earnings'.

Long ago, we realised that one trick to accumulating wealth was to treat savings & investments as passive income generators rather than monies to be consumed by spending.