Savings Interest Tax?...

molokoid

Hi,

I recently got a tax bill from a few years back when i'd received interest on some savings but it was collected at standard rate instead of higher rate. Hence i had to pay the difference plus interest back to HMRC.

I'm about to remortgage my house to which I currently have an offset savings linked mortgage, meaning i'm not collecting and interest on savings and not liable for any tax. If i move to a normal mortgage and a separate savings account is there anyway in the HMRC's eyes i can offset the two and not pay the interest on the savings account?

TIA

BoGoF

In a word, no.

With an offset account you are not actually paid the interest and that is why it is not taxable. No way round this with a 'normal' mortgage/savings

trevormax

If you have a spouse (husband, wife, civil partner) that does not earn or doesn't earn much, transfer the savings into their name allowing them to use their unused personal allowance (as long as you trust them not to run off with the money). Or get an ISA. Otherwise, I do not think you will be able to avoid the tax on the interest.