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Flexi to Easy Access savings account

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I have some money in a Flexi Cash ISA earning 3.63% (variable), if I leave the minimum balance and withdraw the rest to open a new  higher interest rate 5% variable  account with CHASE.
and then pay this money back into my Flexi CASH ISA before 5/4/26. Will the interest I earn outweighs the tax I have to pay? 

Some of CHASE TC's :
'You can only withdraw from the account by transferring funds to other accounts held with us or other UK banks. You can make as many withdrawals as you like with no penalties.'
' The current interest rate applicable can be found in the app or on our website (or you can contact us). Interest is paid on the first calendar day of the month and is calculated on a daily basis.)

https://www.chase.co.uk/gb/en/legal/chase-saver-account-terms-and-conditions/
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Comments

  • eskbanker
    eskbanker Posts: 37,189 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    20122013 said:
    Will the interest I earn outweighs the tax I have to pay?
    What would be the effective marginal rate of tax payable on the income?
  • 20122013
    20122013 Posts: 470 Forumite
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    edited 4 July at 1:05AM
    eskbanker said:
    What would be the effective marginal rate of tax payable on the income?
    At the moment I have no income so I am on a basic tax rate. I will be a higher tax rate payer, when the sale of my property is completed, I still think I should go with my plan in my OP.  I would like to be able to work out the calculations for the interest rate and also CGT. 





  • 35har1old
    35har1old Posts: 1,923 Forumite
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    20122013 said:
    eskbanker said:
    What would be the effective marginal rate of tax payable on the income?
    At the moment I have no income so I am on a basic tax rate. I will be a higher tax rate payer, when the sale of my property is completed, I still think I should go with my plan in my OP.  I would like to be able to work out the calculations for the interest rate and also CGT. 





    Is this a second property?
  • 20122013
    20122013 Posts: 470 Forumite
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    35har1old said:
    Is this a second property?

    It was a buy to let. 
  • eskbanker
    eskbanker Posts: 37,189 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    20122013 said:
    eskbanker said:
    What would be the effective marginal rate of tax payable on the income?
    At the moment I have no income so I am on a basic tax rate. I will be a higher tax rate payer, when the sale of my property is completed, I still think I should go with my plan in my OP.  I would like to be able to work out the calculations for the interest rate and also CGT. 
    There still isn't really enough to go on, in terms of how much (if any) of this additional taxable savings interest would fall within your £500 personal savings allowance, but if that's ignored then your 5% interest rate effectively becomes a net 3% for a higher rate taxpayer, i.e. less than you'd earn in the ISA.

    The CGT calculation is obviously an entirely different question but doesn't affect your income tax liability - it isn't clear how selling a BTL property would result in you becoming a higher rate taxpayer, are those unrelated?
  • 20122013
    20122013 Posts: 470 Forumite
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    edited 5 July at 12:10AM
    eskbanker said:
    20122013 said:
    eskbanker said:
    What would be the effective marginal rate of tax payable on the income?
    At the moment I have no income so I am on a basic tax rate. I will be a higher tax rate payer, when the sale of my property is completed, I still think I should go with my plan in my OP.  I would like to be able to work out the calculations for the interest rate and also CGT. 
    There still isn't really enough to go on, in terms of how much (if any) of this additional taxable savings interest would fall within your £500 personal savings allowance, but if that's ignored then your 5% interest rate effectively becomes a net 3% for a higher rate taxpayer, i.e. less than you'd earn in the ISA.

    The CGT calculation is obviously an entirely different question but doesn't affect your income tax liability - it isn't clear how selling a BTL property would result in you becoming a higher rate taxpayer, are those unrelated?
    I have some money in my Flexi ISA Account and was trying again to transfer some of it out to YBS  Flexi ISA and 6 weeks in I still get the same error ie cannot do the transter at this time. So I will withdraw most of it and put into Chase account (non ISA). I think I will have to pay tax on the interest. 

    Also,  I hope to make a gain from the sell of my BTL. I think I'd have used up all my personal allowance and the way I think I will be able to minimise tax is to invest in stocks, otherwise in some savings accounts and get tax on it. 

    Thanks for clarifying as I had thought that when I have sold my BTL I will have to pay CGT and also income tax PS:   a while back I think you have helped me worked out that it maybe better to move this money to an new ISA to earn more interest than directly transfer a low 0.5% matured ISA to S&S ISA. and still in that process and not understand enough to select a fund, appreciate that, as I have at least earned 3.13% more. thank you.

  • eskbanker
    eskbanker Posts: 37,189 Forumite
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    At the risk of stating the obvious, capital gains tax is payable on capital gains and income tax is payable on income!

    Selling a BTL property for a profit (exceeding the CGT threshold) will give rise to a CGT liability but won't make you a higher rate (income) taxpayer.

    The benefits (or not) of moving money from an ISA to a taxable account are completely dependent on what your income tax situation is, so it remains impractical to offer guidance without more facts to go on regarding income....
  • 20122013
    20122013 Posts: 470 Forumite
    100 Posts First Anniversary Name Dropper
    edited 5 July at 12:43AM
    eskbanker said:
    At the risk of stating the obvious, capital gains tax is payable on capital gains and income tax is payable on income!

    Selling a BTL property for a profit (exceeding the CGT threshold) will give rise to a CGT liability but won't make you a higher rate (income) taxpayer.

    The benefits (or not) of moving money from an ISA to a taxable account are completely dependent on what your income tax situation is, so it remains impractical to offer guidance without more facts to go on regarding income....
    I think I have said that I have 'no income'. 
  • Eco_Miser
    Eco_Miser Posts: 4,853 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    If you have a low income, the first £12570 of any income is tax-free. Then the next £5000 (Starting Rate for Savings) of interest is taxed at 0%, as is £1000 Personal Savings Allowance. You can also get £500 of dividends at 0% outside an ISA. Anything inside an ISA is of course exempt.
    Eco Miser
    Saving money for well over half a century
  • 20122013
    20122013 Posts: 470 Forumite
    100 Posts First Anniversary Name Dropper
    Eco_Miser said:
    If you have a low income, the first £12570 of any income is tax-free. Then the next £5000 (Starting Rate for Savings) of interest is taxed at 0%, as is £1000 Personal Savings Allowance. You can also get £500 of dividends at 0% outside an ISA. Anything inside an ISA is of course exempt.
    If you make £20,000 interest does that mean the first
    £12750 tax free, then next 
    £ 5000  is at 0% tax?
    £ 1000 is at 0% tax?
    then the remaining interest £1250 (£20,000 - £12750 - £5000 - £1000) will be taxed at 20%?

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