Being taxed twice on savings

savetilibleed

There is a good article about the way we are being taxed twice on savings, once when earned, and again on the interest by Andrew Gilligan.

tradetime

savetilibleed wrote: »

There is a good article about the way we are being taxed twice on savings, once when earned, and again on the interest by Andrew Gilligan.

.....and if you save up enough, you'll be taxed on some of it again when you die

tradetime

In fact you might even argue that since VAT is a tax everytime you buy something you are being taxed on you money again

whu

savetilibleed wrote: »

There is a good article about the way we are being taxed twice on savings, once when earned, and again on the interest by Andrew Gilligan.

That is not new news (although I don't agree with it) - it is well known that you get taxed on your earnings and then either 20% or 40% on savings interest depending on whether you are a lower or higher rate tax payer

talana

I'm not saying I agree with it, but you're not being taxed twice on the same money are you?.

1. You're taxed on your initial income
2. If you then use those earnings to generate secondary income (ie interest), then you're being taxed on that secondary income. :rolleyes:

Just as if you had secondary income from any other source, you'd also be liable to tax.

tradetime

talana wrote: »

I'm not saying I agree with it, but you're not being taxed twice on the same money are you?.

1. You're taxed on your initial income
2. If you then use those earnings to generate secondary income (ie interest), then you're being taxed on that secondary income. :rolleyes:

Just as if you had secondary income from any other source, you'd also be liable to tax.

I agree, without having read the article as it's an old recycle, tax on savings interest is tax on "new income".however this is not the case for and death tax, that money has all been taxed, similarly taxes added to the purchase of anything is effectively taxing that money again.:rolleyes:

Jake'sGran

When I worked I was determined that, in retirement, I would not pay tax. By using first the TESSA, then PEPs and then ISAs I did manage it. Problem is that now, with cash ISAs, the interest is (or was) never as good as fixed rates or instant access savings. There are people who said it was not worth using cash ISAs as the interest saved was more than the income tax that would be paid but at least there was no need to mention ISAs on tax returns. But does the whole lot get taxed when my executors sort it out? I'll be past caring by then though!

tradetime

But does the whole lot get taxed when my executors sort it out? I'll be past caring by then though!

ISA's and other "tax exempt" products are all lumped together as part of you estate upon death, anything over the IHT threshold will be taxed regardless of it's origin to the best of my knowledge, this of course does not affect the exemption of passing inheritance to a spouse.

opinions4u

Perhaps you should look at it another way.

While you get taxed on your savings interest, at least they don't screw you for national insurance on it.

Or is that giving them ideas?

Broadback

Strangely I agree with death duties. What I strongly disagree with is the way it is administrated. Most of us that leave, or perhaps that should be have been are left, money that is above the "free" band will pay full duty on that money. However if you are one of the privileged few you do not, this can be avoided. How do you think it is that all the landed gentry, Dukes and whatnots, still have their massive estates? If they paid death duties, like us peasants, those estates would have been broken up long ago.:mad:

tradetime

Strangely I agree with death duties

Would you care to make a case for them, I like to think I'm willing to hear and weigh up all ideas, perhaps you have a perspective I have not considered.