Tax return? Groan!

masonic

friolento said:

mebu60 said:

Ayr_Rage said:

mebu60 said:

Thumbs_Up said:

A big groan from me too! Just sent it off. I found it tricky, some people will struggle with this, i mean yes i get dividends but they are contained in a ISA their was no distinction. Anyway, done now, i let you know if they come chasing me for undeclared tax or wot not.  

You don't include any income from an ISA or pension on your tax return. 

Pension income most certainly DOES have to be declared on a SA return !

Poor choice of terminology on my part. Was of course referring to investment income. 

Investment income must also be declared, unless it is in an ISA.

...or within a pension

friolento

masonic said:

friolento said:

mebu60 said:

Ayr_Rage said:

mebu60 said:

Thumbs_Up said:discussion about taxing of pensions

A big groan from me too! Just sent it off. I found it tricky, some people will struggle with this, i mean yes i get dividends but they are contained in a ISA their was no distinction. Anyway, done now, i let you know if they come chasing me for undeclared tax or wot not.  

You don't include any income from an ISA or pension on your tax return. 

Pension income most certainly DOES have to be declared on a SA return !

Poor choice of terminology on my part. Was of course referring to investment income. 

Investment income must also be declared, unless it is in an ISA.

...or within a pension

You are 100% right of course - but I didn't mention pensions since there had already been a discussion about taxing of pensions in this thread.

For the avoidance of doubt, my understanding is:

- gains in a pension wrapper are tax free for as long as they remain in the wrapper. Once you draw from that pension, up to 25% of it might be tax free. The rest is taxable income and must be declared as such. Whether you actually pay any tax depends on your total taxable income. 

- gains in an ISA wraper are tax free. You don't pay tax when spending money from an ISA wrapper.

Have I got this right?

masonic

friolento said:

masonic said:

friolento said:

mebu60 said:

Ayr_Rage said:

mebu60 said:

Thumbs_Up said:discussion about taxing of pensions

A big groan from me too! Just sent it off. I found it tricky, some people will struggle with this, i mean yes i get dividends but they are contained in a ISA their was no distinction. Anyway, done now, i let you know if they come chasing me for undeclared tax or wot not.  

You don't include any income from an ISA or pension on your tax return. 

Pension income most certainly DOES have to be declared on a SA return !

Poor choice of terminology on my part. Was of course referring to investment income. 

Investment income must also be declared, unless it is in an ISA.

...or within a pension

You are 100% right of course - but I didn't mention pensions since there had already been a discussion about taxing of pensions in this thread.

For the avoidance of doubt, my understanding is:

- gains in a pension wrapper are tax free for as long as they remain in the wrapper. Once you draw from that pension, up to 25% of it might be tax free. The rest is taxable income and must be declared as such. Whether you actually pay any tax depends on your total taxable income. 

- gains in an ISA wraper are tax free. You don't pay tax when spending money from an ISA wrapper.

Have I got this right?

Absolutely, it was the previous use of the wording "from an ISA or pension" rather than "within an ISA or pension", followed by the correction "investment income" (presumably referring to the aforementioned pension, but still failing to make a distinction between income within and income from) that got us here.

There is one circumstance where you can access your full pension tax free, but it's not a very nice one, namely if you are diagnosed with a terminal illness under the age of 75 and given a life expectancy of less than a year.

waveydavey48

Thanks everyone. i'm registered for government gateway already. Do the banks send customers a document saying how much interest has been earned in that year and if so is it as simple as putting that figure on the tax return? 

masonic

waveydavey48 said:

Thanks everyone. i'm registered for government gateway already. Do the banks send customers a document saying how much interest has been earned in that year and if so is it as simple as putting that figure on the tax return? 

Some require a bit of chasing. Some fail to do it for closed accounts. I would recommend keeping your own records as you go along. A running total can also be helpful.

friolento

waveydavey48 said:

Thanks everyone. i'm registered for government gateway already. Do the banks send customers a document saying how much interest has been earned in that year and if so is it as simple as putting that figure on the tax return? 

They do, often electronically nowadays but sometimes by Post. There is often a delay for when these statements are produced.

I ignore them all, and instead just keep a record of the interest payments as they occur. That way, I know at any point in time how much taxable, and non-taxable, interest I have earned. From my records, I can also work out quite easily how much tax I owe on my savings.

badger09

As well as keeping your own records of all accounts and interest credited, it’s a good idea to download statements. This is especially important if you move money around various accounts and close them as some providers don’t allow online access to closed accounts & receiving interest statements can be hit & miss. 

Always good to have the evidence to dispute HMRC figures😉

Ayr_Rage

waveydavey48 said:

Thanks everyone. i'm registered for government gateway already. Do the banks send customers a document saying how much interest has been earned in that year and if so is it as simple as putting that figure on the tax return? 

Some banks do it automatically, others only send a certificate of interest on request.

I am using the ancient but still useful Microsoft Money 2005 and enter all my interest manually as it is paid.

Copies of Money are still available and it quite happily runs on Windows 10 and 11.

mebu60

Ayr_Rage said:

waveydavey48 said:

Thanks everyone. i'm registered for government gateway already. Do the banks send customers a document saying how much interest has been earned in that year and if so is it as simple as putting that figure on the tax return? 

Some banks do it automatically, others only send a certificate of interest on request.

I am using the ancient but still useful Microsoft Money 2005 and enter all my interest manually as it is paid.

Copies of Money are still available and it quite happily runs on Windows 10 and 11.

I use the ancient but still useful sheet of A4 paper and record all my interest manually as it is paid :-) 

waveydavey48

Very interesting, thank you all.

So I can just wait until I see online that interest has been paid, write down the amount and date credited and provide that info to HMRC. Is that right?

Finally, when should I fill in a tax return?

All help appreciated.