Do I need to file a tax return 30 August 2022 at 9:31AM in Cutting tax 6 replies 212 views

mugston

Gov.uk has the criteria that if over £100k total income is earned in a year, a return must be filed.

- If a fixed term savings matures, is the interest on this amount classified as income, or is it the capital that we already had, along with the interest?

- Are gambling winnings included (I know they are not taxed)

Thanks

Dazed_and_C0nfused

Outside of ISA's or some NS&I the interest is taxable income.  Not the capital.

No, gambling winnings aren't included.

mugston

Thanks, but the official wording is;

"What was your total income for the year?

To work this out, add up all your income - for example, salary before tax, taxable benefits (such as a company car), and income from investments or pensions."

So it says income, not taxable income.

Gambling winnings are not specifically stated.

I would imagine investment capital would not fall under it, as it cannot be income if it was already held, and only the profit is the income.

MDMD

It’s based on adjusted net income, which starts with taxable income.

https://www.gov.uk/guidance/adjusted-net-income#what-is-adjusted-net-income

Jeremy535897

Gambling winnings are never counted as income for any tax or benefit purpose. The reason is simple: most people lose overall, and if you tax the winnings, logic dictates that there must be some sort of relief for losses.

mugston

MDMD said:

It’s based on adjusted net income, which starts with taxable income.

https://www.gov.uk/guidance/adjusted-net-income#what-is-adjusted-net-income

Thanks.

I can't see it being stated anywhere (is it?) that by total income means adjusted net income, but I hope you are correct.

Another question that is not well defined is;

"Did you get more than £10,000 from dividends or savings and investments?

Income from savings and investments includes:

• savings interest
• money from bare trusts
• interest in possession trusts"

Would capital gains on an ETF fall under this?

Jeremy535897

Although HMRC say you must file a tax return if your total income exceeds £100,000, there is no legislation specifically requiring this. However, if your adjusted net income exceeds £100,000, legislation provides that your personal allowance is withdrawn by £1 for every £2 of that excess. That often means that an underpayment arises, which would create the requirement to complete a tax return (section 7 Taxes Management Act 1970).

Capital gains arising on ETF holdings are not income for tax purposes, unless the ETF is a non-reporting one.

If you are issued with a notification to complete a tax return, you need to send one whether you owe tax or not.