Savings and stocks & shares tax limits

sherringham2001

I currently have a S&S ISA, two regular savings accounts, a standard savings account and I have just opened a Trading 212 invest account. I read somewhere that I need to keep track on interest and dividends I receive, and when I go over a certain amount, I need to report this for tax purposes.

Does anyone know the amount where I would have to disclose what I have received? I used to have a cash ISA with the S&S ISA and I remember I had to keep within the ISA limit for these two combined. Are there any limits when having savings accounts, S&S ISA and an invest account that I need to be aware of?

Thanks for reading.

george4064

Summary of tax allowances can be found here: https://www.gov.uk/income-tax-rates

and here: https://www.gov.uk/individual-savings-accounts/how-isas-work

eskbanker

https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return includes a link to an HMRC calculator that'll help determine your requirement to tell them about your unearned taxable (non-ISA) income from savings and/or investments.

It's not as simple as a fixed amount - savings interest and dividend income (outside ISAs) is taxable so can affect your overall income tax position, but there are nil-rate bands that reduce the liability....

jimjames

sherringham2001 said:

Does anyone know the amount where I would have to disclose what I have received? I used to have a cash ISA with the S&S ISA and I remember I had to keep within the ISA limit for these two combined. Are there any limits when having savings accounts, S&S ISA and an invest account that I need to be aware of?

Thanks for reading.

The limit is £20k per year for contributions to your ISAs so whatever you pay into cash isn't then available for S&S ISA. Personally I think it seems pointless using the cash ISA allowance if you have S&S investments outside the ISA wrapper and I only use S&S ISA myself.

eskbanker

parking_question_chap said:

Slightly off topic theoretical question for ISAs as I am considering opening one soon.

Say for example you buy £20k worth of stock in an ISA and its value increases 50% to £30k. Can you sell and withdraw £20k worth leaving a balance of £10k then later in the year pay in another £20k? I suppose I am asking if the £20k limit is for net deposit or total deposit.

I am not lucky enough to be able to do this. Just wondering.

The £20K is how much new money you can pay into ISAs (from outside them) during a tax year, which doesn't include transfers, but if the ISAs are flexible ones then you can withdraw and replenish later in the same tax year without that counting towards the £20K contribution allowance, so in some cases your example would work.

https://www.moneysavingexpert.com/savings/flexible-isas/

Buying and selling within the ISA (without withdrawing), and growth of investments, don't affect the contribution limit either.

Edit: looks like the post I was replying to was deleted while I was typing....

sherringham2001

Thanks for the the information. I looked at the links and it looks like there is not tax on dividends of up to £2000, and interest up to £1000.

Mr.Saver

sherringham2001 said:

Thanks for the the information. I looked at the links and it looks like there is not tax on dividends of up to £2000, and interest up to £1000.

Just remind you, excess reportable income counts toward the dividends/interest too, and it's not distributed to investors as a cash payment. So even if you've only received less than £2,000 dividends in a tax year, the addition of excess reported income may push you over that. The HMRC internal manual is the definitive guide, but not that easy to understand. Vanguard's guide explains it in details, and the Monevator blog is a much lighter read on this topic.
On a side note, excess reported income will affect your funds' cost basis, which may help you reduce your capital gains tax bill.

eskbanker

sherringham2001 said:

Thanks for the the information. I looked at the links and it looks like there is not tax on dividends of up to £2000, and interest up to £1000.

It can look like that simplistically, but in fact all dividends and savings interest are taxable but the tax is 0% within those nil-rate bands, the subtle distinction being that these income streams still contribute to your overall taxable income and can move you across bands if you're near a threshold, thereby increasing your total tax liability.  The savings 'allowance' is also reduced to £500 for higher rate taxpayers.

https://www.moneysavingexpert.com/savings/personal-savings-allowance/

sherringham2001

I find it very confusing