Cash ISA Queries

jimjames

UTD1992 said:

. Open a savings account now with £40K at 5% to receive £833 interest by the end of March. Would this all be tax free?

Where is this £40k at the moment? You have £1000 (or £500 depending if you're higher rate taxpayer) and it doesn't matter when in the tax year that is earned. But if you already have £40k sitting somewhere it might already be earning interest or could possibly be used in a more efficient way like pensions.

UTD1992

jimjames said:

UTD1992 said:

. Open a savings account now with £40K at 5% to receive £833 interest by the end of March. Would this all be tax free?

Where is this £40k at the moment? You have £1000 (or £500 depending if you're higher rate taxpayer) and it doesn't matter when in the tax year that is earned. But if you already have £40k sitting somewhere it might already be earning interest or could possibly be used in a more efficient way like pensions.

Thanks for your post. I just opened up a savings account with £20K and will transfer another £20K if I'm reading your response correctly. Both were in my current account which doesn't pay interest. so I have generated zero interest this tax year. I'm a basic rate tax payer, so I think I should be fine gaining £833 interest (approximately) between now and the start of April which would all be tax free. Does that sound correct?