NSANDI Reclaim tax on 65+ bond?

teddysmum

I rang HMRC for an R40 form, as I don't have a printer and actually mentioned where the tax had been taken (ie a 65+bond)and I wasn't told that I couldn't reclaim now.

xylophone

Note 3.1 - Please note that claims can only be made on tax taken from bonds in the tax year that the bond matures and the interest has actually been received.

http://www.bishopsfp.co.uk/nsi-savers-urged-to-be-wary-of-tax-trap/

"The problem lies in the fact that, technically speaking, funds held in NS&I’s bonds are considered ‘available’ to savers – despite the fact that savers are subject to a penalty of 90 days loss of interest if they access the funds prematurely.

A HMRC spokesperson said: “In general, interest counts towards a saver’s PSA when it ‘arises’ – that is when it is received, or made available to the recipient. Interest has been made available if it is credited to an account on which the account holder is free to draw."

Pincher

I usually wait a few months before doing my mother's taxes.


The banks and building societies take their own sweet time in sending tax certificates, if at all. Santander did one in May 2015, for 2014/15 tax year.


By June, I start checking, and chase the stragglers.


If you are too pro-active, they'll just hand you another certificate in July, and you have to do another R40, for £2.43.

joe134

Pincher wrote: »

I usually wait a few months before doing my mother's taxes.


The banks and building societies take their own sweet time in sending tax certificates, if at all. Santander did one in May 2015, for 2014/15 tax year.


By June, I start checking, and chase the stragglers.


If you are too pro-active, they'll just hand you another certificate in July, and you have to do another R40, for £2.43.

same here.
act in haste, repent at leisure.
there's no rush.
with so many accounts, that pay monthly, I work out estimate, wait for full tax statements, and if they don,t arrive by end of june, send in my estimate.
hmrc will work it out, (normally)
waiting for tax statements , can take forever.

Regulo

I've been helping a friend with reclaiming her tax from her 65+ bonds - she invested in both 1 year and 3 year bonds. In mid April we filled out and sent off an R40 for her 1 year bond which matured in February 2016. Two days later, she received her 3 year bond annual statement! Can we fill out a second R40 for the same tax year, or do we wait and fill one out at the maturity date (January2018)?

xylophone

Write a brief letter to HMRC explaining that the figures for interest received and tax deducted on the R40 just submitted were understated and give the correct amounts?

teddysmum

Regulo wrote: »

I've been helping a friend with reclaiming her tax from her 65+ bonds - she invested in both 1 year and 3 year bonds. In mid April we filled out and sent off an R40 for her 1 year bond which matured in February 2016. Two days later, she received her 3 year bond annual statement! Can we fill out a second R40 for the same tax year, or do we wait and fill one out at the maturity date (January2018)?

Why wait until 2018 to reclaim tax paid recently ?


Give HMRC a ring and ask what you should do, as the chances are that they haven't looked at your friend's R40 yet, so could cancel it on receipt on someone's desk and just consider a more up to date one.


I'm still waiting for an R40 to be sent, as I don't have a printer and on enquiring about the delay was told that holdups are caused because forms are only sent out in batches.

teddysmum

I rang today to ask about claiming back tax in year one of a 65+ three year bond. The lady I spoke to said that, normally, you would receive interest on maturity of a bond, at which point the tax would be deducted, but that 65+ bonds appeared to be a special case, as tax has actually been taken and so reduced the money accumulating and depriving you of savings interest on the tax taken.


She went away to speak to a tax technician and came back saying that the technician said that these bonds are different, but there have been no special rulings made, so we can't claim until maturity of the bond.

xylophone

She went away to speak to a tax technician and came back saying that the technician said that these bonds are different, but there have been no special rulings made, so we can't claim until maturity of the bond.

I do not think that this can be correct.

Consider the information required on a tax return and consider the statement of interest from NS&I above.

It is quite clear that interest paid and tax deducted must be declared for the year 2015-16.



If additional tax is due then it must be paid in this tax year because the interest has been credited and added to the account this tax year.

HMRC would take any additional tax due in this tax year.


This is because the interest is available to draw in this tax year even though there would be a penalty to draw it. See post 13 above.

It must therefore follow that if the interest is declared on the tax return for 2015-16 (as it must be by law) and any underpaid tax paid in this tax year then the corollary must be that any overpaid tax must be refunded in this tax year.

xylophone

See also https://www.moneyadviceservice.org.uk/en/articles/pensioner-bonds-a-guide-to-the-fixed-rate-savings-bonds-for-over-65s


"The bonds don’t pay a regular income. Interest is added to your account on each anniversary and paid at the end of the term.

The interest is taxable and is paid with 20% tax taken off. If you’re a higher-rate or additional-rate taxpayer you have to declare the interest to HMRC and pay the extra tax due. If you’re a non-taxpayer or pay 0% on your savings income, you can apply for a refund of the tax using form R40."


And consider this - if the bond were a five year bond, would a non taxpayer have to forego the interest paid in the first year because tax overpaid can only be claimed for the past four years?