Kim Williams APFS
- Financial Planning Director and Chartered Financial Planner at Kreston Reeves Financial Planning Services Limited
- +44 (0)330 124 1399
- Email Kim
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View all peoplePublished by Kim Williams on 11 April 2023
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For savers, the rise in interest rates is positive however there are some points which you should be aware of moving into the 2023/24 tax year. It is wise to plan ahead for this, so action should be taken at the start of the tax year.
Prior to April 2016, all bank interest was paid with a deduction for tax. This has since changed and all bank interest is paid gross – you need to declare this to HMRC each tax year if taxes are due on your bank interest. Your bank interest forms part of your total taxable income.
If your total taxable income is:
It is important to note that your bank interest needs to be added to your other income to determine your total taxable income. This can give rise to other tax implications. For example, your bank interest could:
It is important to start organising your wealth at the start of the 2023/24 tax year to make use of any tax allowances you may have, such as:
Do remember that the parental settlement rules remain in place. Parents are able to place savings into their children’s name, but anti avoidance rules prevent parents from gaining any benefit to this. Where parents gift monies to their minor children, and the interest exceeds £100, the parent will be taxed on all income arising as if it is their own. This can be avoided by using Junior ISAs but if that child has a Child Trust Fund in place you are unable to hold a Child Trust Fund and a Junior ISA at the same time.
Please note that these figures are correct on 21st March 2023 and based on our understanding of the tax rules for 2023/24 tax year.
To ensure you are making best use of opportunities available to you please contact Kreston Reeves Financial Planning Services on +44 (0)1227 768231 or provide your details on our online enquiry form.
The content of this article is for information only and does not constitute formal financial advice. This material is for general information only and does not constitute investment, tax, legal or other forms of advice.
You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation.
Kreston Reeves Financial Planning Services Limited, Independent Financial Advisers. Authorised and regulated by the Financial Conduct Authority.
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