Recently retired

Mumto2

I'm helping my MIL with reinvesting some money from fixed term bonds. She retired in Jan 09.
I happened to mention had she registered for gross interest on any of her accounts, which she hasn't.
then i asked if she'd completed a tax return - no again, she had done one for 07/08. She has rung the tax office today and they are saying they don't expect her to complete one and will look into it.
I dont' know the full scale of her investments (will find out later in week), but am expecting it to take her over the threshold of allowance.

Question - should she complete a tax return for her retirement year
- should she register for gross interest on some/all of her investments or does she have to reclaim at the end of the tax year using statements etc.

Seems quite a lot of money to have to reclaim, but I'm not sure if you can do half/half with the accounts.

Many thanks

fengirl_2

She does not have to complete a tax return to reclaim tax on investments. A simple claim form R40 is enough. Once she gets in the SA system she will never be able to get out!
She cannot register for gross interest on any account if she is liable. Its all or nothing.

Mumto2

fengirl wrote: »

She does not have to complete a tax return to reclaim tax on investments. A simple claim form R40 is enough. Once she gets in the SA system she will never be able to get out!
She cannot register for gross interest on any account if she is liable. Its all or nothing.

Brilliant - that's helped a lot. Will see how much there is all together later in the week, then look on the website for the R40.

Mikeyorks

Presumably she has some income from pension etc ..... which will absorb a chunk of her personal allowance (PA)? But - as fengirl correctly says - if her income + gross interest exceeds her PA, then she can't file R85s selectively.

But do bear in mind that if her interest starts (it's the top slice of income) anywhere below £PA + £2440 ...... then the 10% tax band which still exists for Savings interest applies for the relevant part of the interest above PA and up to PA + £2440 :-

http://www.hmrc.gov.uk/rates/it.htm (top of the final table on this page)