Interest on Savings

[system2319]

Hi all,

DF retired. He has various savings accounts. I keep hearing that you have a limit of £1000 interest earned from savings.

What happens when you exceed the £1000 22/23?

I have finance LPA so just looking at it all as the interest rates are increasing.

Thank you.

By the way, these savings accounts do not include an ISA.

You need to pay tax on the additional interest.

if you can put savings in Cash Isa as this then is tax free interest

Already got a cash ISA. The tax - would I have to fill in a form? DF does not have the ability.

All banks, building socs etc run a tax returns program every year where interest received is reported to Hmrc. Just give them a ring and ask what to do. They're usually quite helpful.

You should recieve a tax code to reflect the total interest from all accounts from one year in the following tax year when HMRC know total interest paid above the £1000 tax free allowance and you will pay tax on this in retrospect.

He may not have to pay any tax on savings interest over £1k if his income from pensions is lower than £17,570pa. See here for more info www.gov.uk/apply-tax-free-interest-on-savings

@Chuffles Just read that - he is over by about £45.00!

In the current tax year or the previous one? If current, then a £45 donation to charity?

Could he look at putting some in Premium Bonds or a stocks and Shares ISA if he doesn’t want the faff?

Hi,

Thanks for all your suggestions.

Current tax year, already got the premium bonds. Wouldn't be comfortable doing the stocks and shares ISA as it is me who is in charge of the finances, DF not having the capacity.

Financial adviser time is the route I am going to go down.

Is this £1000 across all accounts, or per account?

Is this £1000 across all accounts, or per account?

across all accounts

Already got a cash ISA.

which year did you put money in?

you can add further £20000 next April which may help future years, then the year afterwards and so on

have you both used your ISA allowance of £20000 this year?

Don’t worry about it. As PP said, HMRC will adjust his tax code.

You may get a bill if it’s a big difference, so put 20% aside for the tax or if it’s over by a lot more than £1000 then call HMRC and ask them to adjust the tax code in advance based on how much interest you think is going to be paid.

You can move another £20k into an ISA next year from 6th April to get him out of paying tax on that but sometimes the interest rates are higher on non ISA accounts and you are better off paying the tax.