For small investors the start of the new tax year heralds some good news with some new tax free allowances in addition to any ISA allowances or ISA that income that you may have.
Interest:
Banks and Building Societies will no longer deduct tax on your interest from 6 April 2016. Instead, you will receive your interest gross and not pay tax in certain circumstances:
Interestingly there is no ‘abatement’ of the allowance, so basically if your income is £1 over the basic rate limit, then you receive only the £500 allowance.
If you receive significant interest which has previously been taxed, then you need to be prepared to pay the tax and complete a Self Assessment.
Many clients may want to call me for a chat about this, or if you're busy and feel more comfortable, then contact us through the website here.
Interest:
Banks and Building Societies will no longer deduct tax on your interest from 6 April 2016. Instead, you will receive your interest gross and not pay tax in certain circumstances:
- For basic rate tax payers the first £1,000 is tax free
- For higher rate tax payers the first £500 is tax free
- For additional rate tax payers there is no tax free allowance
Interestingly there is no ‘abatement’ of the allowance, so basically if your income is £1 over the basic rate limit, then you receive only the £500 allowance.
If you receive significant interest which has previously been taxed, then you need to be prepared to pay the tax and complete a Self Assessment.
Many clients may want to call me for a chat about this, or if you're busy and feel more comfortable, then contact us through the website here.
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