offsetting investment income

chrissiemary

I am a higher rate tax payer and will have to pay extra 20% on interest taxed at source. I also have an interest only mortgage. Can this be offset against Investment income please?

CLAPTON

residential mortgage can't be offset against tax

chrismac1

The bad news is that you are 300 days late for 2013-14 tax planning, if you are in the middle of submitting your 2013-14 self-assessment return. The good news is that you have 65 days left to make a better fist of 2014-15 tax planning.

uknick

OP

This is in no way meant to be sarcastic, critical or any other negative comment, but purely out of curiosity, what made you think you could offset mortgage interest against your personal income?

zygurat789

uknick wrote: »

OP

This is in no way meant to be sarcastic, critical or any other negative comment, but purely out of curiosity, what made you think you could offset mortgage interest against your personal income?

I had a flatmate who, legally, offset his credit card interest against his earned income.
Happy days.

chrissiemary

uknick wrote: »

OP

This is in no way meant to be sarcastic, critical or any other negative comment, but purely out of curiosity, what made you think you could offset mortgage interest against your personal income?

Ignorance. Having lost my husband with a brain tumour last year who being an exdirector of Lloyds TSB used to deal with all our finances, I was left in a position where I had to cash in all his tax free ISA's and reinvest them in non tax free savings.

chrissiemary

chrismac1 wrote: »

The bad news is that you are 300 days late for 2013-14 tax planning, if you are in the middle of submitting your 2013-14 self-assessment return. The good news is that you have 65 days left to make a better fist of 2014-15 tax planning.

Thanks but please see my reply to UKnick. It did seem logical to me that interest paid out could be offset against interest received for tax purposes. It seems to me that widows aged over the age of 65 are penalised for inheriting their husbands pensions which previously had another set of personal allowances to set against them and their tax free ISA's have to be reinvested in non tax free savings. This is what has put me into a higher tax rate.

zygurat789

chrissiemary wrote: »

Thanks but please see my reply to UKnick. It did seem logical to me that interest paid out could be offset against interest received for tax purposes. It seems to me that widows aged over the age of 65 are penalised for inheriting their husbands pensions which previously had another set of personal allowances to set against them and their tax free ISA's have to be reinvested in non tax free savings. This is what has put me into a higher tax rate.

It has been announced that this will be amended at the budget so that in future widows will be able to keep the ISA package, in the meantime you can now put £15K a year into ISAs so 30K in the next couple of months (if you haven't already used thios years allowance).

Nick_C

Do you mean investments (shares, bonds, funds etc) or do you mean savings?

If you are talking about savings, then ISAs are not particularly good value, even if you pay 40% tax, unless you are happy to tie your money up for at least 3 years.

If you mean investments, then presumably you are moving the investments back into an ISA wrapper at the rate of £15K every year.

Is the net rate of return on your investments greater than your mortgage interest rate? If it is not, then pay down your mortgage.