Tax free interest on savings R85 form.

libra10

Am unsure whether I am eligible to claim tax-free interest on savings, by completing an R85 form.

At age 65, my state pension is nowhere near my personal allowance of £9940. However I have savings which increase my income.

Much of my savings are in ISAs saved through the years, and am unsure whether interest from ISAs (which goes back into the ISA) is counted as income, and could therefore bring my annual interest over my personal allowance limit.

We started a 1 year fixed-rate bond at Britannia this morning, interest 3.4%, the assistant said ISA interest would count towards my income, but I thought as ISAs are tax-free, the interest from these wouldn't be considered.

Would be grateful for any advice.

Adx

The whole point of an ISA is it's tax free, and the interest doesn't count as taxable income. I think the assistant was wrong!

chrismac1

Agreed, if you don't know the rules keep your mouth shut! ISAs are completely outside the tax system unless you've invested over the limit in any given tax year.

libra10

Thanks very much.

You've confirmed what I thought.

I thought the assistant was incorrect with the information she gave, but not 100% certain.

It looks like I will be able to fill in R85 forms.

Much appreciated.