inheritance and tax

Dewhirstn

I wasn't sure where to post this but I figured here was better than no where.

I am going to be receiving a sum in the region of £20k in the next one to two months, I know I wont have to pay tax on it when I receive it because it is under the threshold, but I was wondering once I put it in my savings account will I then have to start paying tax on it?

A friend of mine said that the bank will take the tax from my account because it is such a high amount, and that I should consider taking it out of the bank and just looking after it at home, which quite honestly makes me nervous at the thought of it.

Is my friend right or am I safe to leave it in thru bank without having to pay tax on it?

FreeBear

You will pay tax on the interest earned (above a certain level), that is all. You will NOT be taxed on the £20K that is deposited in a savings account.

Mojisola

Stop listening to your friend!

https://www.gov.uk/apply-tax-free-interest-on-savings/overview and the next three pages.

Keep_pedalling

Your friend is an idiot please disregard any financial advice they ever give you from now on. The only tax you would pay would be on any interest earned, and come April 2016 income tax will not apply to the first £1000 of interest earned.

Enjoy your windfall, but do not keep it under your mattresss.

Mojisola

Dewhirstn wrote: »

am I safe to leave it in thru bank

Check out the advice on where to put the money to get the most interest from it -
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest
http://www.moneysavingexpert.com/banking/compare-best-bank-accounts

Keep_pedalling

Your friend may be suggesting not putting this in a bank for other reasons. Do you receive any means tested benefits such as housing allowance or pension credit?

If you do then your windfall will see those reduced. Hiding you inheritance under those circumstances is not a good idea, so they need to be declared.

Dewhirstn

Thanks for all the help everyone.

I'll tell my friend that he's an idiot officially certified by the forumites of MSE.

p00hsticks

Dewhirstn wrote: »

I'll tell my friend that he's an idiot officially certified by the forumites of MSE.

Rather than tell him he's an idiot, take the opportunity to educate him. As freebear has said, currently tax is only due on interest earned on savings, if it's not in an ISA, where interest is tax free. And from April, you can earn up to £1000 in interest each year before any tax is due.

getmore4less

Dewhirstn wrote: »

I am going to be receiving a sum in the region of £20k ......

A friend of mine said that the bank will take the tax from my account because it is such a high amount

just ask which tax and how much.