Working Tax credit and tax free??

browngirl_2

Hi All
When I renewed my tax credit last month I included the interest I had earned from an inheritance last year. They disregard the first £300 but had to declare the amount over that which wasnt much. But wanted to be completely honest!! I am not a tax payer however and so should I have declared the interest anyway??
Any advice
Thanks

Jowo_2

Tax system and benefits system have interdependencies but are separate - the status in one doesn't always affect the other, as students who receive tax free stipends and grants find out.

Tax credits are means tested. Means testing has a dependency on income. Interest on bank accounts is income.

browngirl_2

Thank you for the reply and useful info:)

sunnyone

if you still have some of your inheritance left ISAs are the best way to keep it without having any problems with tax credits because they dont count for tax credits even if you have tens of thousands of pounds saved away in them.

For cash ISAs the limits just over 5k this year or much more for stocks and shares ISAs.