Tax credits and Premium Bonds winnings?

Beachcomber372

Hi, I am currently receiving Tax Credits and thinking of putting savings into Premium Bonds.
If I were lucky enough to win a prize would that amount need to be declared?
Cheers.

NedS

Good question!

Tax credits rules state capital is disregarded but you must declare any interest (income) on your capital above £300.

Premium Bonds give winnings which are tax free, not interest which is taxable income (and must be declared if above £300), so my interpretation would be that any winnings would be deemed capital, not income. The same argument could be made for Lottery winnings - would you declare these as income? No.

Happy to be proven wrong if someone can find guidance that suggests otherwise.

calcotti

Agree with Ned. Income from tax free investments is ignored.
https://www.gov.uk/guidance/tax-credits-working-out-income#other-income

Saving and investment income
Include the amount before tax is taken off. Do not include interest from tax-exempt investments like Individual Savings Accounts. 

Beachcomber372

calcotti said:

Agree with Ned. Income from tax free investments is ignored.
https://www.gov.uk/guidance/tax-credits-working-out-income#other-income

Saving and investment income
Include the amount before tax is taken off. Do not include interest from tax-exempt investments like Individual Savings Accounts. 

Thanks, I thought that might be the answer but I just wanted to double check as I couldn't find much info on the net specifically mentioning Premium Bonds and Tax Credits. 😊