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Need a bit of clarification on self assesment please
lanceuppercut
Posts: 57 Forumite
in Cutting tax
Sorry, a massive newbie when it comes to tax returns/forms, never been in a situation where I've had savings or anything but I guess I should start being sensible and ask questions:
If the money I save in my current accounts comes from my wages (so that's already taxed, right?), is there an upper limit on the amount of money in the current accounts before I need to start filling in the assessment forms for it? Or am I okay because it's already been taxed?
If there is, and I put the money into an ISA, is that money is then exempt from any self-assessment criteria?
What happens if/when I take the money out of the ISA, will I then be hit for that year?
You need to report:
-income that hasn’t been taxed and is £2,500 or more, eg from savings, investments, tips, commission
-income from savings and investments that has been taxed and was £10,000 or more before you paid tax on it
If the money I save in my current accounts comes from my wages (so that's already taxed, right?), is there an upper limit on the amount of money in the current accounts before I need to start filling in the assessment forms for it? Or am I okay because it's already been taxed?
If there is, and I put the money into an ISA, is that money is then exempt from any self-assessment criteria?
What happens if/when I take the money out of the ISA, will I then be hit for that year?
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Comments
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lanceuppercut wrote: »If the money I save in my current accounts comes from my wages (so that's already taxed, right?), is there an upper limit on the amount of money in the current accounts before I need to start filling in the assessment forms for it? Or am I okay because it's already been taxed?
It's not the actual money in any account that is important or where it comes from. What is important is if that money earns interest. The interest is new income and is taxable. Most banks pay interest net of basic rate tax but some accounts, often NS&I pay gross interest.If there is, and I put the money into an ISA, is that money is then exempt from any self-assessment criteria?
What happens if/when I take the money out of the ISA, will I then be hit for that year?
Money in ISAs earn interest that is tax free so this interest does not have to be declared. If you remove money from the ISA and it then earns interest after that point, that interest would be taxable. However the interest earned whilst in the ISA doesn't become taxable just because you removed it from the ISA.
Why are you doing SA anyway?0 -
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