Tax on Interest from Savings

No. Since, as you say, your interest is just *above* (i.e. not below) the personal allowance, you cannot be a non tax payer.

You should:

either ask your tax office for a tax return, and then fill it in and return it, ticking the box which says you want the overpaid tax refunded,

or else ask your tax office wheter they can refund overpaid interest without your needing to complete a tax return (though it's a doddle and nothing to be afraid of).

Has this situation only just arisen, or are you set to collect many years' worth of tax refunds (plus accrued interest thereon)?

Oficially, you are not suposed to do this unless your income is completely below the tax free limit.

you should ask the revenue for a tax form to fill in for a refund of the over-payment.

tim

Thanks for your replies. Yes, this has only just arisen. I was made redundant in November and will probably retire. So, I am talking about the tax year 2007-2008.

Ross

In message , Ross writes

The 'correct' procedure is to allow the tax to be deducted and claim the excess back from hmr&C, but if *I* were in your position then.........

Away. They'll be onto you faster than you can say Captain Beefheart.

Ross, do you still have a mortgage (JB, I use the word "have" loosely)? If so, you are presumably making payments out of your now non-existant income by drawing on your savings. If so, desist, forsooth! Use some of the savings to pay down the loan. Use enough of the savings to reduce the gross interest from them to below the personal allowance. Use more if you like and pay the mortgage off early. It saves you more loan interest than you would have earned from the savings, unless, unusually, your loan interest rate is lower than your savings rate.

It'll take them longer than you can say Half Man Half Biscuit.

John Boyle writes

I'd move some of it into ISAs, quick!

In message , Ronald Raygun writes

The Captain was on a repeat of the Old Grey Whistle Test the other night on BBC4. I am sure you saw it. It wasnt very good though, it was from his 'Tragic Band' days.

Good Advice!

In message , Peter Saxton writes

F****** Hell its Fred Titmus! (Must have escaped from the Trumpton Riots)

Reminds me of Bickershaw 1972, tired, wet, muddy and cold.

Sounds hellish, like it would make you wish you were dead, and grateful when you discover that you are.

Rather you than me. My idea of outdoor music is playing wind quintets in the manse garden at the church fete, under the weeping willow lest there should be a hint of drizzle.

Exactly, I felt they were pathetic, just some kind of self indulgent pub band.

Wishbone Ash, Family and the Kinks were a lot more entertaining.

Or something with capital growth paid out in say 5 years as against income now. By then you will be retired.... and will be over 65? with an increased personal allowance.

In message , Peter Saxton writes

Ah Ha! Sounds like a music compatriot! Fast & Bulbous! Did you know the Magic Band (without Don) are still doing occasional tours ?

In message , Peter Saxton writes

I cant remember which line up it was that played Bickershaw, was it the real magic band or the tragic band?

Quality! Wishbone Ash are playing in Blackpool in march/april I think.

In message , biggirlsblouse writes

BUt he will not have any income, which I think is what he wanted.

He *will* have an income by then (his pension), but *not until* then.

What he wanted was to have a low enough taxable income, until then, to be able to declare himself to be a non tax payer and to get his savings interest without deduction of tax at source.

So investing part of his savings in a zero-income gain-only vehicle could make that happen, and may even avoid tax on its growth altogether, if (as is to be expected) his gain will be below the CGT threshold when he realises it.

No he wanted an income and wondered how best to handle the tax angle with him being on the cusp.

But what does he live on? "I will have no other income until I retire in 7 years time."