tax on interest earned

pksaraf

One of the articles on thisismoney.com says:

For higher-rate tax payers, interest income and dividends* are also subject to tax when they exceed £7,900 in a year.
http://www.thisismoney.com/20040916/tx82562.html

Does that mean that interest I earn on my savings are not liable to tax if they are less than £7900?

lisyloo

I do not understand this article.
Perhaps someone who understands it could explain it.

As far as I know you would have to pay 40% tax on all interest income unless it is within an ISA (or some special off shore account).

johnllew

Perhaps someone who understands it could explain it.

I don't understand it either but maybe the author may have got the higher rate band and capital gains exemption figures the wrong way round.

isasmurf

A Daily Mail/Evening Standard/Thisismoney journalist getting their facts wrong? Nah, I cant believe that. :P
I'd be more surprised if they actually hired a journalist that knew what they were talking about.

pksaraf

So it is just not me getting confused, probably it is the author who got confused...

lisyloo

It is definitely not right.

If you are a taxpayer then you need to pay tax on ANY interest earned if it is outside an ISA (or some similar tax free scheme).