Am I over the personal savings allowance?

RL11

Dazed_and_C0nfused said:

You seem to be overcomplicating things.

If you are filing Self Assessment returns you include the correct taxable amount.  You don't need to explain yourself. 

If HMRC disagree then they would have to open an investigation into your return.

If you don't file Self Assessment returns then you don't need to do anything at all.  Unless you get a tax calculation (P800 or PA302) you disagree with.

I spend my life overcomplicating things!

I have to submit my interest received as part of getting a refund of tax on my pension. So for the next 5 years I will submit zero for interest (even though my provider will submit an amount and my statement of interest will show the same amount) and in 2027/28 I will submit £2,400 and wait for the tax bill.

Dazed_and_C0nfused

RL11 said:

Dazed_and_C0nfused said:

You seem to be overcomplicating things.

If you are filing Self Assessment returns you include the correct taxable amount.  You don't need to explain yourself. 

If HMRC disagree then they would have to open an investigation into your return.

If you don't file Self Assessment returns then you don't need to do anything at all.  Unless you get a tax calculation (P800 or PA302) you disagree with.

I spend my life overcomplicating things!

I have to submit my interest received as part of getting a refund of tax on my pension. So for the next 5 years I will submit zero for interest (even though my provider will submit an amount and my statement of interest will show the same amount) and in 2027/28 I will submit £2,400 and wait for the tax bill.

You don't need to do that though, you are choosing to do it.

If you did nothing HMRC would automatically refund any overpaid tax.

The above assumes you aren't completing Self Assessment returns.

RL11

Dazed_and_C0nfused said:

You don't need to do that though, you are choosing to do it.

If you did nothing HMRC would automatically refund any overpaid tax.

The above assumes you aren't completing Self Assessment returns.

True - I just like getting my overpaid tax back ASAP.

Whether I report interest or not, I am still left with an unknown of whether I will pay tax on the interest. If HMRC accept what the provider says I receive each tax year, I won't pay tax but if (in 5 years time) they report that I got a total of £2,400 over 5 years, I will. I don't like that unknown situation

RL11

Didn't see this one when I looked before but HMRC Admin 32 is clearly stating to Ethics Gradient that you should report what your annual certificate shows:
https://community.hmrc.gov.uk/customerforums/pt/125fb468-2427-ed11-b5cf-00155d9c6b71#ba528e5c-0a5a-ed11-9562-6045bd0e7273

km1500

Interest is taxable in the year in which it is available to be drawn down, meaning the time when it's made available to you.

So, if you have a three-year bond that is not accessible until the end of the term, all of the interest will be taxable in the final year.

https://www.which.co.uk/news/article/ask-an-expert-how-will-i-be-taxed-on-my-cash-bonds-aMLoY7t6AHPd 

RL11

I'm going to give up on this one. There is no definitive answer that I can find. If it is definitely the case that interest is only taxable on the full amount at maturity, there should be a massive warning with all bonds that you are very likely to exceed your PSA and have to pay tax on the interest. The common sense rule would be that you report what is shown on your annual statement of interest - what's the point of them, if they are wrong?

Albermarle

There is no definitive answer that I can find.

I think that is where we are.

I for sure would not take a Which article as a definitive statement. Some of their stuff on pensions is less than 100% accurate.