Income Tax Rate on Invesment Payout

silentotter

I am a basic rate tax payer and after my personal allowance from my non savings income there is only £5595 left.

An investment I have has just matured with a pay out of £42,469. I understand from the investment company that I am responsible for paying the income tax on it. Can anyone tell me please which rate of income tax I should pay 10% savings rate or 20% basic rate? Also how do I go about paying this tax?

Kinda hoping for the 10% rate if I have to pay any folks, :rotfl:

Thanks
Silentotter

CLAPTON

what sort of investment?
what sort of profit?

jem16

silentotter wrote: »

I am a basic rate tax payer and after my personal allowance from my non savings income there is only £5595 left.

£5595 left of what? Do you mean you earn £13,700 and taking away the £8105 personal allowance leaves £5595?

An investment I have has just matured with a pay out of £42,469. I understand from the investment company that I am responsible for paying the income tax on it. Can anyone tell me please which rate of income tax I should pay 10% savings rate or 20% basic rate? Also how do I go about paying this tax?

Whta kind of investment is this? Is it an Investment Bond or something else? This is important as the tax is handled differently depending on the type of investment.

Kinda hoping for the 10% rate if I have to pay any folks, :rotfl:

Thanks
Silentotter

Extremely unlikely to be at 10%. Your investment isn't savings interest.

sweetietot

silentotter wrote: »

I am a basic rate tax payer and after my personal allowance from my non savings income there is only £5595 left.

Do you mean that you have £5595 of personal allowance left after your non savings income or that you are liable to 20% on £5595?

How much of the investment payout is interest rather than capital being repaid?

silentotter

Yes I pay 20% income tax on my salary, I earn £13700 pa and once you take away my personal tax allowance there is £5595 pa left.

Th investment is a Target Return Plan that was held with Barclay's and it delivered an return of £42469 after it matured.

jem16

silentotter wrote: »

Yes I pay 20% income tax on my salary, I earn £13700 pa and once you take away my personal tax allowance there is £5595 pa left.

You are not due any at 10% then.

Th investment is a Target Return Plan that was held with Barclay's and it delivered an return of £42469 after it matured.

How much was the initial investment?

CLAPTON

if your earned income is 13,700 then you have used you personal allowance and have no 10% allowance

However you are only taxed on the PROFIT of your investment.

You have provided insufficient details of the investment.

Linton

silentotter wrote: »

Yes I pay 20% income tax on my salary, I earn £13700 pa and once you take away my personal tax allowance there is £5595 pa left.

Th investment is a Target Return Plan that was held with Barclay's and it delivered an return of £42469 after it matured.

How much did the TRP cost? Subtract the original cost from the total payout. That's the profit you made which would need to be declared on your tax return as income. If you dont normally fill in a tax return it could be worth talking to HMRC. In my experience they are very helpful. The tax will be 20% of your profit.

xylophone

https://forums.moneysavingexpert.com/discussion/4313583
This?
Income tax on growth.

John_Pierpoint

Are we all going round in circles ?

Is it one of these:
For enhanced tax efficiency, all returns are treated as capital gains rather than income.

You need to post a link to Barclays explaining just what sort of "assured" investment you bought and when.

About twenty years ago I fixed up my late mother with an investment that paid a "monthly income" that was in reality a monthly sale of capital units. The income was sold to a pension fund; in those days the pension fund could reclaim the tax.

Linton

John_Pierpoint wrote: »

Are we all going round in circles ?

Is it one of these:
For enhanced tax efficiency, all returns are treated as capital gains rather than income.

You need to post a link to Barclays explaining just what sort of "assured" investment you bought and when.

About twenty years ago I fixed up my late mother with an investment that paid a "monthly income" that was in reality a monthly sale of capital units. The income was sold to a pension fund; in those days the pension fund could reclaim the tax.

If you look here it says that Target Return Plan gains are expected (presumably only HMRC can give a definitive statement) to be covered by Income Tax.