Tax payable on interest from savings

Red_Fox_2

I will have to pay tax on interest from my savings. Should I transfer money from this account into an ISA or use money from an account which does not earn any interest,

eskbanker

Red_Fox_2 said:

I will have to pay tax on interest from my savings. Should I transfer money from this account into an ISA or use money from an account which does not earn any interest,

Are you referring to trying to avoid interest being taxable in future years, or simply to settling the eventual tax bill for 2023/24?

Edit: I was thrown by your reference to 'using money', but now think I understand that you're essentially looking to pick where to fund an ISA from?  Doing so from a taxable account may be better but much will depend on the actual amounts and rates involved, in that you should generally aim to maximise net return rather than to minimise tax as such - if you have a sizable chunk of cash in an account not paying any interest then that sounds suboptimal for a start, so worth assessing your situation in the round....

Qyburn

Compare the to options and see which gives the best return after tax. It makes no sense to avoid tax by choosing to keep your money in an account with a lower interest rate. 

Grandadtiger

Do my banks inform HMRC and my pension providers ?

ColdIron

The banks (mostly) report interest to HMRC who may issue a new tax code to your pension provider