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tax on bank interest

I am an OAP and pay tax on the interest of my bank savings accts. My friend also an OAP says he does not pay tax on the interest. Can someone explain? Thank you.

Comments

  • adminannie
    adminannie Posts: 183 Forumite
    Hi You have to fill in a form in the bank declaring that you should have savings tax free and they will stop taking tax off you

    Annie
  • jennifernil
    jennifernil Posts: 5,817 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    It all depends on the amount of your pension and how much interest you get.

    If your pension plus your interest (and any other income) is less than your personal allowance , then you can fill in form R85 to get interest paid gross.

    If you have been taxed and are not liable to pay tax, you can reclaim it.

    If you are only a bit over the allowance, your interest is taxed at 10%, so you will have tax to reclaim then too as the bank has to deduct 20% tax.
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