New Santander Upfront Bond - is it worth it?

innovate

thumshie wrote: »

As the "new ipad" only runs LTE on 700 and 2100MHz it won't even work with EE 4G/LTE when they convert some of their 1800MHz from 3G to 4G. And it won't work should ofCom auction go ahead as currently planned as that will convert 800MHz and 2.6GHz!!

Thanks for that! I thought I dimly remembered there was a very good reason for why I didn't buy the mobile one when I bought my iPad.

grey_gym_sock

well, if santander is paying the equivalent of interest with basic rate tax deducted, they are also keeping the 20% "tax".

isn't the ipad really interest paid in kind, and therefore shouldn't it be taxable? perhaps the idea is that HMRC will ignore that because the sums involved are too small.

rpc

innovate wrote: »

OK, it all makes sense now - £624 gross is £499 after Basic Rate tax. This is the price on the Apple website.

A Higher Rate tax payer could effectively get the iPad on the Santander offer for as little as £375, and for an Additional Rate payer it would be even less. So for those people, it sounds a splendid deal.

Aha! Good catch.

Although the iPad may need to be declared as interest and the Ts&Cs allude to this.

The interest is taxable in the same tax year in which it is paid and may affect the rate at which you pay tax.

The upfront interest will be applied to the account net of income tax deducted at the basic rate, unless you are a non taxpayer and have registered an R85 form on the account to receive gross interest. If you have registered for gross interest, the tax element i.e. the additional interest over and above the cost of the iPad, will be returned to you in the form of a cheque.

If you are a higher or additional rate taxpayer the interest applied to the account should be declared on your self-assessment return form. If you are unsure how the upfront interest will impact your tax position, please contact your Tax Office or visit www.hmrc.gov.uk

The upfront interest may affect any benefits you receive. If you are unsure how the upfront interest might impact your benefits, please contact your Benefits adviser or visit www.dwp.gov.uk/directgov/

grey_gym_sock

ah, i didn't read that ... so they are treating it properly as taxable interest.

it's not a bad rate for a 2-year fix, then, but it's at best similar to taking a separate 2-year fix and buying the ipad yourself. and that's only if you really want both that exact model of ipad and a 2-year fix on £8k ... if you really want a different device and a 5-year fix on £10k, there's no point.

innovate

rpc wrote: »

Although the iPad may need to be declared as interest and the Ts&Cs allude to this.

Ah, I didn't read that far! So it isn't a splendid deal for higher/additional rate payers, either.

Only obvious advantages are for Santander.

opinions4u

Are they doing a new kids account with no interest but a goldfish in a bag when you open it?

NikkyWikky

Is this any good now the ipad 4 has been released and ipad 3 value has dropped.

Whats the value of an ipad 3 16GB wifi + celluar data?

ses6jwg

If you open an up front bond you will be send an Ipad 4 now, not an Ipad 3

gozomark

opinions4u wrote: »

Are they doing a new kids account with no interest but a goldfish in a bag when you open it?

Is that the same as Schrödinger's cat ?

NikkyWikky

To confirm ses6jwg, here's the email I got when I emailed them:

Thank you for your email.
The newest version of the ipad available at the time of account opening will be order for you.