ISA unterest and Student Finance Application

alun4

We have built up our cash ISA over the years and been diligent at getting good rates and not afraid of term "lock ins" reviewing. The interest is tax free and has always remained within the ISA shield. The interest is not required to be declared on our tax returns.

BUT

Son is hopefully off to uni and we are on the edge of "The Cliff" with a band for student finance help. Is the interest earned on the ISA products part of the "household income" in these circumstances ?

Porcupine

Holdings in ISAs do count towards means-tested benefits, while pensions don't. I think ISA interest would also count.

So my feeling would be that it would count for a student loans assessment, but I wouldn't trust that. Ringing them up to ask is probably the best thing to do.

StephenM_2

I've been doing student loan parental assessments in England for 5 years now, and I've never included ISA interest an the grounds that they only take into account taxable income. I think it used to explicitly say not to include ISA interest but it doesn't seem to mention it any more, probably hoping that in the confusion people do include it resulting in less finance.

xylophone

http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_196602.pdf

Seems to be asking for all income from savings and investments - nothing said about excluding ISA income (or indeed from other normally non taxable sources like ILNSCs) - best to check?

alun4

xylophone wrote: »

http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_196602.pdf

Seems to be asking for all income from savings and investments - nothing said about excluding ISA income (or indeed from other normally non taxable sources like ILNSCs) - best to check?

That certainly adds a dimension.For example: Index Linked term National Savings products would only attract the advertised interest rate (income) if held to maturity.

StephenM_2

I've got a copy of an older form I filled in which says that if you filled in a Tax Self Assessment Form you should copy the numbers from that. You don't include ISA interest on a Tax Self Assessment Form.

Lokolo

It used to be taxable income but I think it changed a couple of years ago to income. Isn't there a "support sheet" which comes with the form which tells you exactly what you need to include? (or are you new?)

But I will just say that if you are on the boundary and go over, your son won't be losing a lot.

xylophone

StephenM wrote: »

I've got a copy of an older form I filled in which says that if you filled in a Tax Self Assessment Form you should copy the numbers from that. You don't include ISA interest on a Tax Self Assessment Form.

I would strongly advise against using old guidance - tax rules can and do change.

StephenM_2

xylophone wrote: »

I would strongly advise against using old guidance - tax rules can and do change.

The relevant legislation, The Education (Student Support) Regulations 2011, states that the parental contribution is based on taxable income.

xylophone

StephenM wrote: »

The relevant legislation, The Education (Student Support) Regulations 2011, states that the parental contribution is based on taxable income.

Fair enough, but I'd still ascertain that I had current guidance for completing the form and then check if unsure.

As I said in my previous post, (and see form), details of all income from savings and investments are requested whereas in other questions on the form, details of taxable benefits, profits, income sources are specified.

alun4

Lokolo wrote: »

It used to be taxable income but I think it changed a couple of years ago to income. Isn't there a "support sheet" which comes with the form which tells you exactly what you need to include? (or are you new?)

The help sheets online speak of taxable income and all income! The help also advise for the self employed ... that you will have put the figures on your tax return. ISA interest would not go on a tax return so I am hoping this interest can be ignored