The time has come to completely scrap tax on savings

Mikeyorks

undercoat11 wrote: »

My elderly father in law who is 92 is still paying 20% tax on his savings because he has a pension which takes him a few hundred pounds over the tax threshold.

In which case you should help him out? His tax liability for interest from the limit of his pension to the extent of his personal allowance (£9180?) + £2320 (ie up to £11500) ..... is only 10%. So he can reclaim the excess.

(see footnote and then 10% table just above it)

http://www.hmrc.gov.uk/rates/it.htm

LesU

masonic wrote: »

It may look to you like income from an investment, but it isn't. It's a capital gain from an investment. The interest earned on the £15k sitting in your bank account is income... and the taxman will be interested in any amount of capital gain over your personal allowance.

Isn't this just semantics?
I call my work of art '2000 fivers'. It's a glass case with 2,000 fivers stuffed in it. Crazy modern art!
I've bought it and loaned it out to Barclays for 2 years. I think that they are quite interested in it and they have said that after 2 years they will buy it off me. I think the going rate is £11,000.
Is this a capital gain or is it income?

Or is it the Government don't like the idea of reward without a gamble?
The more I risk my money by possibly throwing it all away and getting away with it, then the Government will let me keep my reward?

[Deleted User]

Mikeyorks wrote: »

For a post #1 ....... with an Exclamation in the heading ...... A Big Grin in the body ....... a Roll Eyes and Eek at the end ......... and a fair dollop of rubbish in between them all ........... I would have a long look in the mirror.

I'd like to help you out again. Which way did you come in? :rolleyes:

I suppose all those little medals near your name, make you feel quite important - You're not.

rl290

I am a great proponent for the removal of tax on the interest generated from cash savings. The tax acts as a disincentive to save - something that has been particularly poignant in leading to this economic debt-laden crisis. And, with interest rates so low, the tax is taking away crucial income that some people rely on.

As for the talk of Cash ISAs... I doubt anyone would disagree that the ISA allowance is ludicrously low, and has failed to keep up with inflation. It really should be at least £5,000.

R

Mikeyorks

Deleted_User wrote: »

Which way did you come in?

Unfortunately via your thread.

And despite you keep protesting that you understand it's the interest that's taxed - and not the saving. Your brain and your fingers obviously don't talk to each other :-

Deleted_User wrote:

We pay tax when we earn money, so we shouldn't have to pay tax again when we put it in a bank

:exclamati:D :rolleyes: :eek: ...... just felt the need to join, momentarily, in the childishness.

[Deleted User]

Mikeyorks wrote: »

Unfortunately via your thread.

Indeed!

If you didn't understand my original post, then I suggest you consider suing your brains for non-support!:rotfl:

The fact that I missed out the word interest, obviously confused you a little - Bless!

masonic

Deleted_User wrote: »

The income, or interest from savings, or whatever you want to call it, should not be taxed in my opinion; ever. We pay tax when we earn money, so we shouldn't have to pay tax again when we put it in a bank.

You aren't paying tax when you put it in the bank. You are paying tax on the money the bank pays you for keeping it there.

There are many current accounts that pay 0% interest on credit balances. Put your money in there and you won't pay any more tax.

Why should anyone have to pay income tax if savers don't?

masonic

LesU wrote: »

Isn't this just semantics?
I call my work of art '2000 fivers'. It's a glass case with 2,000 fivers stuffed in it. Crazy modern art!
I've bought it and loaned it out to Barclays for 2 years. I think that they are quite interested in it and they have said that after 2 years they will buy it off me. I think the going rate is £11,000.
Is this a capital gain or is it income?

Or is it the Government don't like the idea of reward without a gamble?
The more I risk my money by possibly throwing it all away and getting away with it, then the Government will let me keep my reward?

If your bank promised to buy your piece of 'crazy modern art' in two years at whatever the going rate may be, then it's a capital gain (or loss ). If you rent it to them for a fee, then that's income.

The Government allows you a personal allowance for both capital gains and income every year, so why do you think they don't like the idea of reward without a gamble? The first £9,600 of capital gains each year is tax free and the first £6,000-£9,000 of income each year is tax free.

LesU

masonic wrote: »

If your bank promised to buy your piece of 'crazy modern art' in two years at whatever the going rate may be, then it's a capital gain (or loss ). If you rent it to them for a fee, then that's income.

The Government allows you a personal allowance for both capital gains and income every year, so why do you think they don't like the idea of reward without a gamble? The first £9,600 of capital gains each year is tax free and the first £6,000-£9,000 of income each year is tax free.

So what's stopping a bank selling you a cheap Ikea print for £10,000 and buying it back guaranteed in a year for £10,000 + 5% and you get the interest tax-free as a Capital Gain?
No, hang on. Isn't that what the US banks did with their bad debts?:D

[Deleted User]

masonic wrote: »

You aren't paying tax when you put it in the bank. You are paying tax on the money the bank pays you for keeping it there. Why should anyone have to pay income tax if savers don't?

Your first two sentences are a complete contradiction - What's the difference?!:rolleyes: You also seem to think that all savers don't work, or never have. Where do you think savings come from exactly?! Savers have paid income tax already. I don't think it's fair that savers then have to pay income tax again, on interest, when they stick it in a savings account. Clearly some people on here have a problem with those that save. Perhaps if more did save, the country wouldn't be in the state it's in. At least David Cameron's got the right idea.