Interest on divorce settlement and tax

[Mybloodycat]

I’m becoming like the sole poster on this board!

A quick question regarding my divorce settlement and the interest it’s accruing, do I get taxed on any of this? The money is from my half of the house/business and it’s in a couple of low interest accounts, but it’s produced a reasonable amount of interest.

Having created havoc with my Tax credits, I’m now wondering if I will get hit with paying tax on the interest which will kind of be the cherry on the cake this week!!

The money is just there until I buy a house.

You’d have to declare the interest for tax purposes.

Thankyou, I am assuming that details will be sent to the HMRC?

I understand financial institutions report to HMRC. If your earnings are less than £100k then you have a tax free saving threshold of £1k. Any interest over £1k may be taxed.

If you put the money in an ISA (cash or stocks & shares) the interest is not taxable. Additionally, premium bond prizes are not taxable.

Before changing any savings get financial advice.