Term Investment Help

firefox26

Hey Guys,

My dad had a 6 month term investment with TSB of 50,000 pound which was paid with interest at net. Dad took the contract out for a further 6 months over the phone with the same contract he just gave them permission to carry it on.

Then he found out they have been paying gross interest instead of stopping it at source. When he went to the local branch they said rules have changed and that 50000+ needs to be paid gross. Is this true?

There now saying he owes a large tax bill, surely the bank should be illegible for this being though they failed to provide him with the correct information?

Alan

dunstonh

It sounds like he has been using their fixed term deposits based on money market rates.

surely the bank should be illegible for this being though they failed to provide him with the correct information?

Why? It doesnt sound like he sought financial advice and the bank is correct in the information it has supplied.

Interest will be paid gross on deposits of £50,000 or more which are fixed for five years or less, irrespective of your tax status and you will be responsible for the payment of any tax which may be due.

Lloyds own documentation says:
The interest rate is fixed for the whole period. It is paid gross and can be paid into your business account at the end of your chosen term or added to your original investment and automatically re-invested.

There now saying he owes a large tax bill

No problem with that. Had it been on a conventional bank account he would not have benefited from gross roll up. That is one of the reasons some use these old fixed term deposits.