Taxes in investments

jzi19

Hi there folks,
I have a question I hope someone out there might be able to answer. I took out an investment with a bank which matures in a few years time. When that date comes and I get back the investment + return, what exactly am I taxed on? Is it the entire sum, or the return?

cheerfulcat

You will be taxed on the return, Depending on the nature of the investment you may be able to use your capital gains tax exemption - more information is required regarding the investment and your tax status for a more precise answer.

jzi19

Hi, Thanks for that answer.

I wasn't sure originally whether the total amount would be classified as income for the year, which would have taken me into the higher tax bracket. The investment was an abbey national guaranteed growth plan, which used a maxi ISA as part of the investment, returning anything from 21-55%. after 5 years.

With savings interest rates quite high at the moment, I have wondered if putting them into savings would have been as good a plan. The only thing is savings interest rates are unpredictable and general advice has been investments tended to have better returns than savings. At the time of choosing the investment, I have to admit I never knew about sites such as this, and needed to move a lump sum out of a savings account that was paying 2.xx %. Wish I knew more about this site then!:beer:

dunstonh

The Uk has around 13 tax wrappers into which investments can be placed. Each can have different ways of handling the tax.

The investment was an abbey national guaranteed growth plan

GEBs like this have been available on the unit trust, investment bond and ISA wrappers as well as SIPPs and personal pensions.

If its unit trust based then it will fall under capital gains.