How do I deal with non-ISA savings in HMRC self assessment?
Discussion
I've been filing tax self assessments (SA) over the last few years, mainly to get my 20% tax relief on my pension contributions and to avoid the child benefit claw back.
[EDIT: I mean, I've been using the TA to modulate the amount of pension contribution I need to keep my taxable income as close to £50k as possible]
Until now, my savings have been tied up in ISAs so I haven't included any interest earned in my SA return.
I've now maxed out my ISAs and I want to open up a non-ISA savings account or investment account. I'll have in the order of £30k in these non-ISA accounts.
How do I account for this in my tax SA?
From memory, the form asks if I have earned any interest on savings. Does this have to be over a threshold amount before I declare it on the form? What if it's in a Vanguard investment account that is fluctuating in value each month? Does that interest/growth only matter when it's withdrawn as cash?
I'm keen to understand how this works before I select my account/investment.
[EDIT: I mean, I've been using the TA to modulate the amount of pension contribution I need to keep my taxable income as close to £50k as possible]
Until now, my savings have been tied up in ISAs so I haven't included any interest earned in my SA return.
I've now maxed out my ISAs and I want to open up a non-ISA savings account or investment account. I'll have in the order of £30k in these non-ISA accounts.
How do I account for this in my tax SA?
From memory, the form asks if I have earned any interest on savings. Does this have to be over a threshold amount before I declare it on the form? What if it's in a Vanguard investment account that is fluctuating in value each month? Does that interest/growth only matter when it's withdrawn as cash?
I'm keen to understand how this works before I select my account/investment.
Edited by FreeLitres on Friday 30th December 11:46
The Leaper said:
Easy. When completing your SA, just add the details of the untaxed income in the relevant box (box 2) of the Income section. For the year 2021/22, this appears on page 3 of the standard SA form (may vary from year to year).
R.
What about investments in S&S? Say I invest £10k in a platform like vanguard. Say, on the day that I complete the form is shows £10,600, do I add £600 in the box, or is that only a true £600 if I withdraw it? It might all vanish the next day depending on the performance of the stocks. What if my balance shows £9k that day? What if it jumps up an extra £2k after I submit the form online?R.
FreeLitres said:
What about investments in S&S? Say I invest £10k in a platform like vanguard. Say, on the day that I complete the form is shows £10,600, do I add £600 in the box, or is that only a true £600 if I withdraw it? It might all vanish the next day depending on the performance of the stocks. What if my balance shows £9k that day? What if it jumps up an extra £2k after I submit the form online?
This is then CGT not income tax. You only report the gain when you realise it, IE sell the underlying asset.FreeLitres said:
What about investments in S&S? Say I invest £10k in a platform like vanguard.
Unless you've been investing more than £20,000 of new money each year those S&S investments should surely be in an ISA and completely outside the whole tax return process.If you hold funds outside an ISA you will have received a year end tax statement from the provider or platform. That statement will show what is "interest" and what is "dividends".
FreeLitres said:
The Leaper said:
Easy. When completing your SA, just add the details of the untaxed income in the relevant box (box 2) of the Income section. For the year 2021/22, this appears on page 3 of the standard SA form (may vary from year to year).
R.
What about investments in S&S? Say I invest £10k in a platform like vanguard. Say, on the day that I complete the form is shows £10,600, do I add £600 in the box, or is that only a true £600 if I withdraw it? It might all vanish the next day depending on the performance of the stocks. What if my balance shows £9k that day? What if it jumps up an extra £2k after I submit the form online?R.
R.
OP: What you are referring to is often referred to as a General Investment Account & is subject to both income tax (from dividends received) & CGT (from gains or losses generated when selling stocks or funds).
After the end of the tax year the platform operator will generate a Tax Certificate which will detail both dividends & gains/losses which you enter in the relevant sections of the Tax Return. Obviously if you haven't sold any stocks or funds there won't be any CGT liability but you may well still have to pay tax on dividends received.
After the end of the tax year the platform operator will generate a Tax Certificate which will detail both dividends & gains/losses which you enter in the relevant sections of the Tax Return. Obviously if you haven't sold any stocks or funds there won't be any CGT liability but you may well still have to pay tax on dividends received.
Gassing Station | Finance | Top of Page | What's New | My Stuff