Tax Tips

Non-Taxpayers - If you are a Non-Taxpayer and your total income is below the personal allowance, you may register to receive interest on banks or building society gross. Even if most of your bank and building society interest will be covered by your allowances, you cannot register some accounts and not others. They must all be covered

Accrued Income Scheme - This applies to interest bearing securities such as government stock. When you sell stock just before the next interest date you are taxed on the accrued interest to the settlement date and the buyer`s income is respectively reduced. If you sell after the interest date, your income is reduced and the buyer is taxed on the interest from the settlement date to the next interest payment date. This does not apply if the nominal value of all income scheme securities held is less than £5000 in the tax year that the next interest payment falls due or the previous year

Individual Savings Accounts (ISAs) - There are 2 types of ISA, a stocks and shares account and a cash account. Investors have an overall annual subscription limit of £7200 and of this you can invest up to £3600 in cash and any balance left over from the cash ISA can be invested in stocks and shares ISA. Investments under the scheme are free from income tax and capital gains tax and withdrawals may be made without loss of tax relief. You should be aware however, that if any amount is withdrawn, that part of the limit is not available for further investment in that tax year. From 6th October 2009 these limits were increased to £10200 and £5100 respectively for people aged over 50 and from 6th April 2010 these increased limits will apply to all.