Interest included in gross income?

taxipls

If I earn £15k a year (which puts me at 20% tax rate) but earn £50k in interest, would I still only pay 20% tax? Or would my tax rate be increased to 40% since the total income + interest = £65k.

Thanks

TheCyclingProgrammer

Yes it will be included in your gross income. You would pay higher rate tax on the amount in excess of the higher rate threshold (so approx. the last £22k on £65k gross).

taxipls

hell no, I'm moving to the Bahamas

HappyMJ

taxipls wrote: »

hell no, I'm moving to the Bahamas

LOL...if you were earning £50k in interest you would have at least £2,000,000 and I would doubt you would be wasting your time posting on here as there are better things you could be doing with your time.

You could invest this to get £11,000 of realized capital gains each year which wouldn't have any tax deducted.

You could also max out any ISA's and tax free investments so you don't earn as much.

You could contribute the £15k of earnings to a pension.

There's plenty of ways to avoid paying 40% tax.

grey_gym_sock

taxipls wrote: »

hell no, I'm moving to the Bahamas

by taxi?