Different investments are subject to different tax treatment. The following is based on our understanding, as at 6 April 2011, of current taxation, legislation and HM Revenue & Customs (HMRC) practice. all of which are subject to change without notice. The impact of taxation (and any tax relief) depends on individual circumstances.
Unnecessary Tax on Savings
If you or your partner is a non-taxpayer, make sure you are not paying unnecessary tax on bank and savings accounts. Avoid automatic 20% tax reduction on interest by completing form R85 from your bank or product provider, or reclaim is using form R40 from HMRC.
Individual Savings Accounts (ISA’s)
You pay no personal Income Tax or Capital Gains Tax (CGT) on any growth in an ISA, or when you withdraw your money. You can save up to £10,680 per person in an ISA in the 2011/12 tax year. If you invest in a Stocks and Shares ISA, any dividends you receive are paid net, with a 10% tax credit. The tax credit cannot be reclaimed by anyone including non taxpayers. There is no further tax liability. The impact of taxation (and any tax reliefs) depends on your individual circumstances.
National Savings & Investments (NS&I)
You can shelter money in a tax-efficient way within this Government-backed savings institution. During Budget 2011 it was announced that NS&I is to relaunch index-linked savings certificates. Returns will be tax-free and maximum that can be saved is £15,000 per individual per investment. Learn more about NS&I
