Icesave Fixed Rate Account FSCS Option

sloughflint

isofa wrote: »

That's what I would have thought normally... but these aren't normal circumstances, if you are letting the term account run to maturity, you cannot benefit from the partial interest paid (which we didn't request) on 10-10-08, as you cannot access it early...

This has nothing to do with Icesave or abnormal cicumstances. It is to do with HMRC.

When is interest taxable?

Your interest is taxable in the tax year that it is paid to you, or credited to your account, even if part of it has accrued in the previous tax year. So you do not have to include any interest earned this year when working out your taxable income if it hasn't been paid yet.

http://www.hmrc.gov.uk/tdsi/key-info.htm

KingL

we haven't actually been paid the 10-10 interest though, have we? Presumably those ppl staying on til the end will have it removed from the statement and will have it lumped in with the final payment at the end of term at which point we will declare it, no?

isofa

sloughflint wrote: »

This has nothing to do with Icesave or abnormal cicumstances. It is to do with HMRC.

http://www.hmrc.gov.uk/tdsi/key-info.htm

I don't dispute this, and agree with the normal procedures. But you could say that the account suddenly isn't running according to the T+Cs those with annual interest, have found interest paid on the 10-10-08, and maybe (or maybe not), those electing to have their term accounts run to maturity will find the 10-10-08 interest removed, (as per KingL above) or maybe not.

Just a discussion point really.

sloughflint

KingL wrote: »

we haven't actually been paid the 10-10 interest though, have we?

It's been credited to the account.

KingL

...for now

sloughflint

isofa wrote: »

I don't dispute this, and agree with the normal procedures. But you could say that the account suddenly isn't running according to the T+Cs those with annual interest, have found interest paid on the 10-10-08, and maybe (or maybe not), those electing to have their term accounts run to maturity will find the 10-10-08 interest removed, (as per KingL above) or maybe not.

Just a discussion point really.

I'm sorry but I don't think I understand what point you are making.

Tax issues are to do with HMRC.

If the 10/10 interest is removed then so will the tax deducted. If you are a high rate tax payer, you will know by 05/04/09 what to declare.

isofa

sloughflint wrote: »

I'm sorry but I don't think I understand what point you are making.

Tax issues are to do with HMRC.

If the 10/10 interest is removed then so will the tax deducted. If you are a high rate tax payer, you will know by 05/04/09 what to declare.

:rolleyes:

Tax issues are indeed to do with the HMRC, I and most others are well aware of this :beer:

The point is that many of us (as you hint at), do our own tax returns, and others are high rate tax payers, so my original point was whether there may (or may not) be special circumstances for interest on these term accounts, in advanced for the 5/4/09, as per my original question.

The point was asking if anyone knows (or if they had been info post somewhere) what will happen to the interest paid already to the fixed term accounts, for those who are letting them run into maturity. As many people plan taxes in advance to avoid moving into a high rate tax band for example, so delaying interest payments for fixed term accounts is often very useful, and used by many to keep in certain tax bands.

If suddenly they have hundreds or thousands of extra interest credited to a fixed term account, which they weren't expecting, they need to start planning for the year end. Perhaps reducing income from other sources to stay in bands etc.

Mine isn't great as it's well within the (clearly useless) "passport" limits, but it's still a discussion point.

sloughflint

Not sure why the sarcasm. If what I put was of no use to you then so be it.

I keep my interest as tax efficient as possible and I am happy.

isofa

sloughflint wrote: »

Not sure why the sarcasm. If what I put was of no use to you then so be it.
I keep my interest as tax efficient as possible and I am happy.

No sarcasm - I even added a cheers smiley..., you didn't seem to understand my point, and kept mentioning, clarifying with, "I'm sorry but I don't think I understand what point you are making", so I expounded.

I too keep my affairs as efficient as possible. And have accountants who work for me too.

But imagine those on the cusp of a higher tax bracket, managing their affairs very efficiently, and suddenly having extra income they didn't envisage, until when the term accounts matured. Or those who don't pay tax at all, suddenly being pushed into the basic rate band due to this extra income.

Hence my discussion point.

KenC_3

bryanb wrote: »

But your account matures 31/10 so you could get interest till then if you used the paper application, or have I misunderstood? I was suggesting you ask them if it would take 6 weeks in your situation.

I could get the additional 24 days interest but it may take me an additional 42 days plus form posting time to do so, thereby leaving me, without interest for longer. Mind you, this depends upon the rate I could reinvest at.

I see what you mean though. Do you think they may fast track for those deposits that have matured? I don't think they would.