Tax on Savings

Gummomarx

I gained £860 interest from a savings account - from opening in September 2023 to closing on 1 December 2024. Will this amount be split between both tax years or deemed entirely as earned in 2024-25?

(I have interest from another account that will knock me over the £1,000 limit for tax.)

Yorkie1

When was the interest paid? That's the date that is usually relevant.

Dazed_and_C0nfused

Gummomarx said:

I gained £860 interest from a savings account - from opening in September 2023 to closing on 1 December 2024. Will this amount be split between both tax years or deemed entirely as earned in 2024-25?

(I have interest from another account that will knock me over the £1,000 limit for tax.)

If the interest was paid in December 2024 then it is income for 2024-25.

Sarahspangles

If the interest was paid in two chunks, you’ll be taxed based on when the interest was credited.

Most accounts pay on the birthday of the opening, interest in September 2024 and December 2024 falls in 2024/25 tax year.

A few accounts pay on 31st December or March (this used to be more common) in which case the first interest payment would have been in 2023/24.

Gummomarx

Interest paid in December 24 for the entire period from Sep 23.

eskbanker

Gummomarx said:

Interest paid in December 24 for the entire period from Sep 23.

Unusual for there to be no interest paid at all in the first year - this would normally only apply to fixed term ones paying on maturity, but they wouldn't generally allow premature closure.  Was it a 14/15 month fixed term product that matured last month?

Gummomarx

eskbanker said:

 Was it a 14/15 month fixed term product that matured last month?

Exactly that.