Halifax "reward" not "interest"

bowlhead99

diamonds wrote: »

Just to throw a spanner in the works...lol it is not a legal obligation for any bank to pay rewards.

Yes it is a legal obligation for them to pay you a reward if you enter into a contractual arrangement for them to pay you a reward subject to certain criteria being met and those criteria are met. Basically, you don't have to do very much and they are obligated to give you money. The money is not linked to the balance maintained on the account and as such is not interest. It is just them paying you an ongoing income.

I could say "lol it is not a legal obligation for any employer to pay me salary". It wouldn't be true if I have an employment contract and I fulfil the terms of that contract.

Example...Halifax

If it is £6.25 taxed to £5


Is this not wrong ?

Why would it be wrong? They are withholding 20% tax, as the government says they must on these annual payments of income to you.

It is not interest but a reward where no asset is exchanged for payment it could possibly fall under Capital Gains Tax ?

Capital gains tax is a tax chargeable when someone disposes of an asset for proceeds (or perhaps you would say 'exchanges an asset for payment') and those proceeds or that payment is greater than the acquisition cost of the asset. The capital gain is calculated by subtracting the cost of the asset from the sales proceeds of the asset. Where a tax is payable on that gain it is known as the capital gains tax.

If there is no purchase or sale, then a gain has not been made, has it? So there would be no capital gains tax. So, how do you possibly make the logical leap to say 'no asset is exchanged for payment, so it could fall under capital gains tax'? Capital gains seems the very last thing it could possibly fall under if there have been no purchases or sales and no assets exchanged for payment.

That would possibly mean we are all due a tax refund for previous years where rewards are paid from banks being taxed, whereas it is gifted and CGT applies ?

CGT does not apply to gifts received. As mentioned, CGT applies when an asset is sold for more than was originally paid for it. The criteria to get the £6.25 does not involve selling an asset for more than was originally paid for it. It simply involves putting your own money temporarily into an account in your own name and paying some bills or other direct debit payments.

bjbyorkshire

Well folks, I'm as wise as ever...!!!