When does interest earned in a fixed rate savings account count as income for tax purposes?

Notepad_Phil

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

And being taxed for multiple years of interest in one go at maturity has actually happened to you e.g. you've gone over the PSA because of this and been taxed accordingly?

If so, can you remember the account you had, as there are a few accounts that I'm aware of and do warn you of this happening, but personally it's never happened to me when they've not mentioned this, though I may have just been lucky with the accounts I have had not following the 'correct' process.

bristolleedsfan

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

wmb194

bristolleedsfan said:

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

If you had the *option* to have the interest paid away then it arises in the tax year it was credited to the account. Looking at Al Rayan's website for its current two year bond this is the case, an option to pay away or add to the account.

masonic

bristolleedsfan said:

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

Al Rayan is the example I was going to mention. I'll be in the same boat as you this tax year as I think I'll creep over the PSA. I'm pretty sure it is spread for the reason mentioned by wmb194, but I'll be requesting a certificate of profit to be absolutely sure before I complete my tax return. It is a shame so few institutions now produce these automatically, as I'd know for sure already.

bristolleedsfan

masonic said:

bristolleedsfan said:

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

Al Rayan is the example I was going to mention. I'll be in the same boat as you this tax year as I think I'll creep over the PSA. I'm pretty sure it is spread for the reason mentioned by wmb194, but I'll be requesting a certificate of profit to be absolutely sure before I complete my tax return. It is a shame so few institutions now produce these automatically, as I'd know for sure already.

Al Rayan answer to me that it makes no difference whether interest ( in my case quarterly interest) is added to external or to existing fixed rate account, profit gets notified to HMRC yearly.

Ocelot

bristolleedsfan said:

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

The 2-3 year fixed rate accounts that I have to pay tax on annually, although the interest is not accessible until maturity include ones from: Nationwide, Kent Reliance, Charter, Secure trust, Paragon, Atom, Skipton, Coventry and Leeds & Holbeck.

masonic

bristolleedsfan said:

masonic said:

bristolleedsfan said:

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

Al Rayan is the example I was going to mention. I'll be in the same boat as you this tax year as I think I'll creep over the PSA. I'm pretty sure it is spread for the reason mentioned by wmb194, but I'll be requesting a certificate of profit to be absolutely sure before I complete my tax return. It is a shame so few institutions now produce these automatically, as I'd know for sure already.

Al Rayan answer to me that it makes no difference whether interest ( in my case quarterly interest) is added to external or to existing fixed rate account, profit gets notified to HMRC yearly.

Thanks for confirming this.

zagfles

Ocelot said:

bristolleedsfan said:

masonic said:

Bigwheels1111 said:

masonic said:

Bigwheels1111 said:

I’m hoping for 5% plus for 5 year fixed and maybe a 7 year from Shawbrook if their rates are good enough.
I need interest paid yearly and away so I can get an income and pay no tax or a minimum amount.
On money facts you can see the options.
Interest payment, interest must be paid away.

If you're bringing this up in the context of this thread about all interest potentially being declared at maturity, any account where interest is paid away will be spread over the tax years rather than being taxable at maturity.

Sorry should have made it clear, paid away each year is taxed that year, at maturity is taxed for all the years in one go.

 Most providers treat interest as arising monthly/quarterly/annually even if compounded in the account, .

Can you name providers that you have experience of  2 year + fixed rates, interest paid monthly/annually added to account, no access until maturity where interest is treated as arisen during individual tax years,

I have large 3 year fixed rate 2.4% with Al Rayan Bank maturing now, interest was added to account quarterly, not had anything from A.R indicating interest classed as arisen during each tax year.

The 2-3 year fixed rate accounts that I have to pay tax on annually, although the interest is not accessible until maturity include ones from: Nationwide, Kent Reliance, Charter, Secure trust, Paragon, Atom, Skipton, Coventry and Leeds & Holbeck.

Which exactly were the Nationwide ones? Are they the very recent ones? I thought all the previous Nationwide ones did allow access with a penalty, and allowed interest to be paid outside the account?

But they now have some new ones which don't allow access at all, and no option to pay interest outside.