Personal savings allowance

If I have a fixed 3 year savings plan and earn £2700 interest over that period will I be taxed on £1700 (2700-1000 allowance) in the year of maturity or could I carry forward the allowance each year?

MK

Replies

  • Tom_HendoTom_Hendo Forumite
    61 Posts
    Fifth Anniversary 10 Posts
    Forumite
    Tax gets applied for the year the interest is applied to your account. If this is at maturity, only that years tax free allowance, than table amount will apply. 
  • Dazed_and_C0nfusedDazed_and_C0nfused Forumite
    9K Posts
    1,000 Posts Second Anniversary Name Dropper
    Forumite
    There is no "allowance", it's a 0% tax band and it's not something that can be carried forward.

    You may be able to benefit from the savings starter rate band if your non savings non dividend income (wages, pension, business profits etc) are less than £17,570.

    The interest is taxable for the tax year the provider reports it to HMRC so worth checking the terms of the account.
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