Interest on NS andI 65+ Bonds

FOREVER21

I did not subscribe to the bonds when they were first issued as although they pay a good% rate, I am a basic rate tax payer so interst would have been taxed.

However following the proposal to introduce the £1K tax allowance from April 2016 , if I take out one of these bonds after 6April, the interest would then be tax free under the new rules.I know that NS and I can not pay interst gross at present but presumably they will have to change their systems to comply with the new scheme. Even if they don' t change the tax paid would be refunded.

Have I got this right?

masonic

Whether or not they would pay gross interest at that point is unclear, but it would be reclaimable if those new rules come into effect.

Archi_Bald

Sounds a good plan to me, and it should work for both, the 1 year and the 3 year bonds if your total taxable savings will remain below £1,000 in 2016-17.

And, importantly, provided the government of the day doesn't retract the proposed changes. You could wait until May 14 with your final decision as the bonds will be on sale until 15 May 2015. Although it might still be unclear then who will form a government.