Tax help on savings accounts

geordie_ben

Does anyone know if someone who is retired pays tax on their savings?

I'm trying to figure out the best savings method for a family member, I've always been under the impression they shouldn't be paying tax on their savings as they're retired... is this the case?

Any other cases when you don't need to pay tax on savings?

gt94sss2

geordie_ben wrote: »

Does anyone know if someone who is retired pays tax on their savings?

I'm trying to figure out the best savings method for a family member, I've always been under the impression they shouldn't be paying tax on their savings as they're retired... is this the case?

Being retired makes no difference to if one should pax tax on interest - instead it depends on their total income.

The choices are:

- income (including savings interest) below their personal allowance: can register for interest to be paid tax free;

- income above their personal allowance: depending on their income level, they may need to fill in a tax return to get a tax refund or to pay a reduced rate of tax on their savings.

If the income level (+ savings interest) is above their personal allowance, they cannot register their accounts/interest to be automatically paid tax free.

try http://www.hmrc.gov.uk/incometax/tax-free-interest.htm for more information

Regards
Sunil

geordie_ben

gt94sss2 wrote: »

Being retired makes no difference to if one should pax tax on interest - instead it depends on their total income.

The choices are:

- income (including savings interest) below their personal allowance: can register for interest to be paid tax free;

- income above their personal allowance: depending on their income level, they may need to fill in a tax return to get a tax refund or to pay a reduced rate of tax on their savings.

If the income level (+ savings interest) is above their personal allowance, they cannot register their accounts/interest to be automatically paid tax free.

try http://www.hmrc.gov.uk/incometax/tax-free-interest.htm for more information

Regards
Sunil

Perfect, they're defs under their allowance so I'll see how they get registered

Onawingandaprayer

http://www.hmrc.gov.uk/helpsheets/r85-helpsheet.pdf

This is what they want, for each savings account they open.

gt94sss2

geordie_ben wrote: »

Perfect, they're defs under their allowance so I'll see how they get registered

Don't forget they can also reclaim any interest paid since 6 April 2008 - if they were non tax payers then - details on the link I gave you previously.

They just need to fill in a simple tax return for each tax year.

Regards
Sunil

geordie_ben

gt94sss2 wrote: »

Don't forget they can also reclaim any interest paid since 6 April 2008 - if they were non tax payers then - details on the link I gave you previously.

They just need to fill in a simple tax return for each tax year.

Regards
Sunil

Yeah I spotted that form as well. Hopefully get plenty pennies back