Pensioner pay tax on savings

hornets_2

Hi can any help.
Mother in law is paying tax on her savings.
How can i find out if a: should she be, and b: reduce it
She gets £198 pw pension.
She has £58k in Isa
She £2000 in current account(far too much but she wont be told)
She has £5k in savings acount
and finally she has £35k in another saving account-this one she pays tax on.

Any feed back is help full.

zygurat789

Is she over 65?

hornets_2

Yeah shes 72.

MrRedundant

Sounds like she needs to start completing a tax return to ascertain the correct level of tax and either make a payment or get a reimbursement. I'd expect some level of tax to be payable.

zagfles

Tax allowance for 65-74 year olds is 9490 so her pension uses all that up - but looks like she'd only have to pay 10% tax on her savings.

See http://www.hmrc.gov.uk/incometax/tax-free-interest.htm

Mikeyorks

hornets wrote: »

Yeah shes 72.

As her State Pension is £10296 and her Personal Allowance is £9490 ......... then she should be completing an SA Return in order to pay the tax on the £806. Is she doing that?

As the Return will automatically compute the correct tax on her Savings interest. The first £1634 of gross taxable interest will only be chargeable at 10%. Can't compute the overall effect without knowing how much interest she receives?

She is a taxpayer - from the data supplied - so can't complete R85s on any accounts. I assume the £5k account is taxed?