Working Tax Credits and Savings

From
Child Tax Credit and Working Tax Credit - A Guide May 2003
I quote
We will not normally take capital (that is, deposits in
current and savings accounts at banks and building societies, lump sum payments and the value of property, shares and other investments) into account when we work out your entitlement to tax credits.

The pages immediately before this section (19/20) list the forms of income taken into account for Tax Credit purposes. Too much to cut and paste here. These are all the normal, expected, reliable, sources of income stream resulting from work or capital or trusts. It doesn't include the regular drip feeding of extra help towards mortgage from parents. If the mortgage contribution went directly to the mortgage provider without passing through your bank account I suspect that it would be better than you having a choice about how it was spent. They say miscellaneous income of over £300 a year should be declared however There is no mention on the IR welbsite which lists as "Other Income"
Interest on savings and investments,

Income from shares and other holdings,

Trusts and settlements,

Income from estates of deceased persons,

Foreign income,

Industrial Death Benefit,

Widow's Pension,

Widowed Mother's Allowance, Widowed Parent's Allowance,

Income from property,

Income from pensions,

Student Grants for adult dependants (other than those which help to meet child care costs and for books, travel and equipment).


It would be nice to be able to say ring the Tax Credit Helpline for a definative answer but the track record of tax credit helpline is that the more times you ask the more different answers you will get. You might do better at your local Welfare rights provider.

When you give your income for the year, you need to include interest received from savings as other income.

It's right that we do not take the capital into account, just the interest you receive from it.

You can have any amount of savings and apply for WTC, the only issue is that all income from saving sin excess of £300 p/a needs declared as income.

If you put in to premium bonds then you would no longer gain interest and would not need to declare anything ( I believe you dont need to declare winnings as income,just the interest on the winnings), but , although you have a chance of winning with WTC it may be better for you to bank it and cliam the interest as , although you declare interest over £300 as income, you can earn £5220 p/a before your tax credits are actually affected.

Hi

No the ISA is a tax free savings vehicle so income will not be counted if you leave the money in the ISA and reinvest the amount next year.

Any other income will only be counted if it returns more than £300 this tax year (given the interest rates I wish you luck!)

HTH