Tax deducted from source

raindrop12weather

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

flaneurs_lobster

Interest (and any tax owing thereon) earned in joint accounts is considered to be split 50/50.

LITRG

Hi, we have some information on our website on the taxation of savings income Tax on savings income | Low Incomes Tax Reform Group and how income from joint savings accounts is treated Joint income from savings | Low Incomes Tax Reform Group . We hope these links are useful. 

Albermarle

raindrop12weather said:

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

Presume when you say 'investments', you mean 'savings' - there is a critical difference !

The usual way to avoid paying tax on savings, is to have as a much in Cash ISA's as allowed. Are you doing this ?
By the way you can not have a joint ISA, but you can have one each of course.

eskbanker

raindrop12weather said:

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

As above, there are a number of differences between savings and investments - interest income from the former is reported to HMRC by the institutions concerned (including the fact that they're jointly held if applicable), whereas dividend income from investments has to be declared by the recipient.

Assuming it's savings you're talking about, it's not a case of earning interest "beyond what's allowed", it's just that once you use up the various allowances, the income is subject to income tax at your marginal rate.

If you feel it's too much then you can contact HMRC to seek further detail (if you have enough patience), or check to see if there are any anomalies within your online personal tax account, or for advice on here, you'd need to share some figures....

molerat

eskbanker said:

raindrop12weather said:

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

As above, there are a number of differences between savings and investments - interest income from the former is reported to HMRC by the institutions concerned (including the fact that they're jointly held if applicable), whereas dividend income from investments has to be declared by the recipient.

Assuming it's savings you're talking about, it's not a case of earning interest "beyond what's allowed", it's just that once you use up the various allowances, the income is subject to income tax at your marginal rate.

If you feel it's too much then you can contact HMRC to seek further detail (if you have enough patience), or check to see if there are any anomalies within your online personal tax account, or for advice on here, you'd need to share some figures....

HMRC seem to be informed of dividends from somewhere.  MrsM's tax code was reduced due to estimated dividends in excess of £500. She has never declared any dividend income so this was out of the blue and was corrected to a more accurate estimate.  She now has an entry for dividends on her tax account.

eskbanker

molerat said:

eskbanker said:

raindrop12weather said:

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

As above, there are a number of differences between savings and investments - interest income from the former is reported to HMRC by the institutions concerned (including the fact that they're jointly held if applicable), whereas dividend income from investments has to be declared by the recipient.

Assuming it's savings you're talking about, it's not a case of earning interest "beyond what's allowed", it's just that once you use up the various allowances, the income is subject to income tax at your marginal rate.

If you feel it's too much then you can contact HMRC to seek further detail (if you have enough patience), or check to see if there are any anomalies within your online personal tax account, or for advice on here, you'd need to share some figures....

HMRC seem to be informed of dividends from somewhere.  MrsM's tax code was reduced due to estimated dividends in excess of £500. She has never declared any dividend income so this was out of the blue and was corrected to a more accurate estimate.  She now has an entry for dividends on her tax account.

Sounds like they need to update their guidance then!

Check if you need to tell HMRC 

If you have dividend payments over both your unused Personal Allowance and dividend allowance, you need to report these to HM Revenue and Customs (HMRC).

https://www.gov.uk/tax-on-dividends

How to report tax on dividends

You must tell HM Revenue and Customs (HMRC) every year you receive dividends that you have tax to pay on. 

How you report dividends to HMRC depends on how much you received. [etc]

https://www.gov.uk/tax-on-dividends/how-to-report-tax-on-dividends

raindrop12weather

flaneurs_lobster said:

Interest (and any tax owing thereon) earned in joint accounts is considered to be split 50/50.

Thank you that helps to clarify and confirm

raindrop12weather

eskbanker said:

raindrop12weather said:

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

As above, there are a number of differences between savings and investments - interest income from the former is reported to HMRC by the institutions concerned (including the fact that they're jointly held if applicable), whereas dividend income from investments has to be declared by the recipient.

Assuming it's savings you're talking about, it's not a case of earning interest "beyond what's allowed", it's just that once you use up the various allowances, the income is subject to income tax at your marginal rate.

If you feel it's too much then you can contact HMRC to seek further detail (if you have enough patience), or check to see if there are any anomalies within your online personal tax account, or for advice on here, you'd need to share some figures....

Albermarle said:

raindrop12weather said:

Both our pensions (not state) are being deducted at source to pay tax we owe. We create too much interest on our investments, beyond what's allowed. 

These investments are in joint names. Does the HMRC look at joint accounts and tax us both, half each? Or the full amount for each of us? Is it better not to have investments in joint names?
We seem to be repaying more than I would have thought.

I just thought I would ask if anyone knew. I appreciate that we could clarify this by phoning, if you can get through!

Thank you

Presume when you say 'investments', you mean 'savings' - there is a critical difference !

The usual way to avoid paying tax on savings, is to have as a much in Cash ISA's as allowed. Are you doing this ?
By the way you can not have a joint ISA, but you can have one each of course.

Yes, I mean savings. We each have an ISA. Previous contributor says joint account tax interest is split 50/50
Thank you

flaneurs_lobster

raindrop12weather said:

Yes, I mean savings. We each have an ISA. Previous contributor says joint account tax interest is split 50/50
Thank you

Yes but, interest earned in an ISA is free of tax........

eskbanker

flaneurs_lobster said:

raindrop12weather said:

Yes, I mean savings. We each have an ISA. Previous contributor says joint account tax interest is split 50/50
Thank you

Yes but, interest earned in an ISA is free of tax........

HMRC are collecting tax from OP for interest income above PSA, so it must be from the joint accounts held separately from the ISAs, unless these are with Zopa, who have apparently erroneously reported ISA interest as taxable.