# Another tax change I didn't know!!!



## Rabbitcat (Aug 31, 2014)

Apparently from 1st April this year- as announced in LAST YEARS budget- anyone with income of less than £15,600 wont be taxed on savings. 

Only read this today as the news was updating on various tax issues because of today's changes


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## extranjero (Nov 16, 2012)

I thought it was the first £ 1,000 that would be free from savings tax in UK, but if you live in Spain you will be taxed on your savings interest


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## Lynn R (Feb 21, 2014)

Rabbitcat said:


> Apparently from 1st April this year- as announced in LAST YEARS budget- anyone with income of less than £15,600 wont be taxed on savings.
> 
> Only read this today as the news was updating on various tax issues because of today's changes


If that's the case, it's another one that HMRC don't know about either. I have recently sorted out my UK tax code because I started receiving an occupational pension in January (which is certainly less than 15,600), and my personal allowance has been reduced to take account of the fact that I receive some interest which is paid gross because it's in an offshore account (which I told them about). They have sent me my new tax code for the 2015/16 tax year and the same thing applies. 

Are you certain you're not thinking of the 15,000 per year you can save tax free in an ISA, if you're a UK resident?

The promise to bring in a "personal savings allowance" for the first 1,000 in interest is discussed here:-

Budget 2015: Is there still any point in using an Isa? | This is Money


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## Lynn R (Feb 21, 2014)

Did a bit more digging, and blimey it seems you are right after all, Rabbitcat. I found this online:-

https://www.gov.uk/government/uploa...ta/file/414026/Savings_factographic_final.pdf

I am writing to HMRC tomorrow to ask them what they are playing at!


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## Rabbitcat (Aug 31, 2014)

Good god Lynn- I finally got one right!!!!

Surprised myself!!!


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## snikpoh (Nov 19, 2007)

extranjero said:


> I thought it was the first £ 1,000 that would be free from savings tax in UK, but if you live in Spain you will be taxed on your savings interest


Not quite. In this years budget, he announced that the first £1000 of INTEREST would be tax free not £1000 of savings.


This still means that interest will be taken and then has to be claimed back - so no change for expats who are taxed in Spain.


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## Lynn R (Feb 21, 2014)

snikpoh said:


> Not quite. In this years budget, he announced that the first £1000 of INTEREST would be tax free not £1000 of savings.
> 
> 
> This still means that interest will be taken and then has to be claimed back - so no change for expats who are taxed in Spain.


I don't think so - in the press reporting of the Budget measures it said that banks and building societies will not be deducting 20% tax from interest paid on UK accounts wef 1 April 2016, which is when this new Personal Savings Allowance is due to be introduced.

http://www.bbc.com/news/business-31942922


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## baldilocks (Mar 7, 2010)

The date you all seem to be bandying about is 1st April. Is this significant????


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## snikpoh (Nov 19, 2007)

Lynn R said:


> I don't think so - in the press reporting of the Budget measures it said that banks and building societies will not be deducting 20% tax from interest paid on UK accounts wef 1 April 2016, which is when this new Personal Savings Allowance is due to be introduced.
> 
> BBC News - Budget 2015: New £1,000 tax allowance for savers


OK, I stand corrected.

So, in theory, one could get more than £1000 of interest without being taxed but would then have to submit a tax return to pay the 'extra'. If a Spanish resident, then you WILL be paying tax on that bit as it will have to be declared as income here.


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## Lynn R (Feb 21, 2014)

snikpoh said:


> OK, I stand corrected.
> 
> So, in theory, one could get more than £1000 of interest without being taxed but would then have to submit a tax return to pay the 'extra'. If a Spanish resident, then you WILL be paying tax on that bit as it will have to be declared as income here.


If you get an NT (no tax) UK tax code because you have satisfied HMRC that you are a Spanish taxpayer (by providing a certificate of fiscal residence from Hacienda) then you would not need to pay UK tax on any income apart from a Crown pension, and you would have a UK personal allowance to set against that.

Of course you would need to declare all other pension and savings income on your Spanish tax return, and pay tax on it here. But it saves paying some in the UK and then having to claim it back.


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## Dave and Anne Galicia (Nov 15, 2008)

snikpoh said:


> OK, I stand corrected.
> 
> So, in theory, one could get more than £1000 of interest without being taxed but would then have to submit a tax return to pay the 'extra'. If a Spanish resident, then you WILL be paying tax on that bit as it will have to be declared as income here.


Just to be clear you should declare all the interest in Spain as income not just the 'extra' or 'bit' that you are not taxed on in the UK.


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## snikpoh (Nov 19, 2007)

Lynn R said:


> If you get an NT (no tax) UK tax code because you have satisfied HMRC that you are a Spanish taxpayer (by providing a certificate of fiscal residence from Hacienda) then you would not need to pay UK tax on any income apart from a Crown pension, and you would have a UK personal allowance to set against that.
> 
> Of course you would need to declare all other pension and savings income on your Spanish tax return, and pay tax on it here. But it saves paying some in the UK and then having to claim it back.


This is not correct - you still have to pay tax on investment income (savings interest) - changing next year of course.



Dave and Anne Galicia said:


> Just to be clear you should declare all the interest in Spain as income not just the 'extra' or 'bit' that you are not taxed on in the UK.


Of course but you've misunderstood my post. I meant that UK tax payers would have to pay tax on the interest earned in excess of £1000. For Spanish residents, then they will have to pay tax on the first £1000 earned as it ALL must be declared.


We are actually in agreement but your post suggested otherwise.


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## Lynn R (Feb 21, 2014)

snikpoh said:


> This is not correct - you still have to pay tax on investment income (savings interest) - changing next year of course.
> 
> 
> 
> .


Sorry, but you can arrange to have savings interest paid gross already, if you are not a UK resident and you pay tax on it elsewhere, by submitting this form;-


https://www.gov.uk/government/publi...o-receive-interest-without-tax-taken-off-r105


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## extranjero (Nov 16, 2012)

Unfortunately, neither Barclays or Nationwide would not agree to pay interest gross, apparently it's up to them.


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## snikpoh (Nov 19, 2007)

extranjero said:


> Unfortunately, neither Barclays or Nationwide would not agree to pay interest gross, apparently it's up to them.


I argued with Nationwide about this as they said it was HMRC who were forcing them to deduct tax. Having already spoken to HMRC I knew that this was wrong.

Bottom line is that Nationwide will NOT pay interest gross no matter what form you use.

As stated, there are others who operate like this as well.


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## Rabbitcat (Aug 31, 2014)

Interesting 

I wonder are Santander (UK) the same on this?


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## Lynn R (Feb 21, 2014)

snikpoh said:


> I argued with Nationwide about this as they said it was HMRC who were forcing them to deduct tax. Having already spoken to HMRC I knew that this was wrong.
> 
> Bottom line is that Nationwide will NOT pay interest gross no matter what form you use.
> 
> As stated, there are others who operate like this as well.


I get some paid gross by First Direct, and also by the Leeds Building Society, but that's an offshore account so would be paid gross anyway.

I've just posted my letter to HMRC asking about this mention in last year's Budget that people would not have to pay tax on savings from this April if their income is below 15,600. Will update the thread when I get a reply, which I guess may not be for a few weeks.


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## larryzx (Jul 2, 2014)

snikpoh said:


> I argued with Nationwide about this as they said it was HMRC who were forcing them to deduct tax. Having already spoken to HMRC I knew that this was wrong.
> 
> Bottom line is that Nationwide will NOT pay interest gross no matter what form you use.


I did the same with the same result ( until blue in the face ! )

However, the good news is that since the DTA between Spain and UK signed in 2013 and which came into effect in 2014, the HMRC will now, upon request, refund 100% of the tax stopped at source to those who are not tax resident in UK. (Of course excluding that stopped on Crown Pensions and Letting).

It makes my Spanish tax return a little bit more straightforward, as I need not seek to off-set that part of the tax which previously the HMRC woud not refund..


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## extranjero (Nov 16, 2012)

larryzx said:


> I did the same with the same result ( until blue in the face ! )
> 
> However, the good news is that since the DTA between Spain and UK signed in 2013 and which came into effect in 2014, the HMRC will now, upon request, refund 100% of the tax stopped at source to those who are not tax resident in UK. (Of course excluding that stopped on Crown Pensions and Letting).
> 
> It makes my Spanish tax return a little bit more straightforward, as I need not seek to off-set that part of the tax which previously the HMRC woud not refund..


Is that the R 43?
Will my accountant not be able to off set it for this year's declaration for 2014 ?
from what date will interest now have be paid gross on UK accounts ?


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## larryzx (Jul 2, 2014)

extranjero said:


> Is that the R 43?
> Will my accountant not be able to off set it for this year's declaration for 2014 ?
> from what date will interest now have be paid gross on UK accounts ?


As far as I remember my conversation with HMRC, yes it is an R43

I do not believe interest must be paid gross, but that one can now reclaim all of it and not just, was it 12% or 8%?


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## extranjero (Nov 16, 2012)

larryzx said:


> As far as I remember my conversation with HMRC, yes it is an R43
> 
> I do not believe interest must be paid gross, but that one can now reclaim all of it and not just, was it 12% or 8%?


as the Spanish tax year is from Jan-💽April, and the UK year from April- April, I a bit confused as to how I fill in this claim form.
Also in my tax return for 2014, will my accountant be able to offset the tax on savings interest already paid in UK,


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## larryzx (Jul 2, 2014)

extranjero said:


> as the Spanish tax year is from Jan-&#55357;&#56509;April, and the UK year from April- April, I a bit confused as to how I fill in this claim form.
> Also in my tax return for 2014, will my accountant be able to offset the tax on savings interest already paid in UK,


What happens in the first year when you move, i don't know, but after that, when you make the Spanish return you show all the income as from 1st Jan. It then matters not what the tax year is in the UK. My Crown Pension is taxed at source in UK using the UK tax year. There is no conflict. 

And you say, when you fill in the tax form. 

I have in the past done my own return and I have also used the free service provided by the banks a couple of times (in fact on then advice of an accountant who said his fees were not worth paying when the banks will do it free). In recent years I have used a Gestor. 

For the cost of around 50 euros, it not worth the effort. I give her details of my income (worldwide) and she completes the form.


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## baldilocks (Mar 7, 2010)

What I do with my gestor is for each Spanish tax year yy is take ¼ of the UK tax year xx-yy and ¾ of the UK year yy-zz.


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## extranjero (Nov 16, 2012)

larryzx said:


> What happens in the first year when you move, i don't know, but after that, when you make the Spanish return you show the income as from 1st Jan. It then matter not what the tax year is in the UK.
> 
> And you say, when you fill in the tax form.
> 
> ...


What I meant was, when you complete the R43, they ask you to put in the interest from April to April, but the savings interest is declared from Jan- Jan, on the Spanish return, so how do you claim it?


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## larryzx (Jul 2, 2014)

extranjero said:


> What I meant was, when you complete the R43, they ask you to put in the interest from April to April, but the savings interest is declared from Jan- Jan, on the Spanish return, so how do you claim it?


The date you would use in Spain is the date you get it in the Spansh tax year. As I said the UK tax year has no relevance to your Spanish return. So get it in Feb 2013 show it in tax return for 1st Jan to 31st Dec 2013,


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## Lynn R (Feb 21, 2014)

Lynn R said:


> Did a bit more digging, and blimey it seems you are right after all, Rabbitcat. I found this online:-
> 
> https://www.gov.uk/government/uploa...ta/file/414026/Savings_factographic_final.pdf
> 
> I am writing to HMRC tomorrow to ask them what they are playing at!


I did indeed write to HMRC, and their reply (dated 20 May) was delivered a few minutes ago. It says

"I can confirm that your tax coding for 2015-2016 has now been amended. I have removed the deduction for untaxed interest from your code completely, because as you state in your lette your taxable income is well below 15,600."

So, the announcement in the 2014 Budget was correct, but they certainly haven't publicised this widely, have they? If anybody else is in a similar position, get your letters in the post!


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## extranjero (Nov 16, 2012)

Lynn R said:


> I did indeed write to HMRC, and their reply (dated 20 May) was delivered a few minutes ago. It says
> 
> "I can confirm that your tax coding for 2015-2016 has now been amended. I have removed the deduction for untaxed interest from your code completely, because as you state in your lette your taxable income is well below 15,600."
> 
> So, the announcement in the 2014 Budget was correct, but they certainly haven't publicised this widely, have they? If anybody else is in a similar position, get your letters in the post!


Will this not happen automatically, or do you have to apply?


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## Lynn R (Feb 21, 2014)

extranjero said:


> Will this not happen automatically, or do you have to apply?


It didn't happen automatically for me. It only became an issue this January when I started to receive an occupational pension as well as some untaxed interest (which I was registered with HMRC to receive gross). When they issued me with a tax coding for my pension it was reduced because of this untaxed interest. So when Rabbitcat drew attention to this seemingly little known announcement in the 2014 Budget, I printed off a copy of the document I linked to in my earlier post and wrote to HMRC to ask why my tax code should have been reduced as my total income is less than 15,600, and you have seen the reply I got.

Don't know about you, but I have seen no mention anywhere in the press about this not having to pay tax on savings if your income is below that level.


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## garryg163 (Jun 10, 2015)

*Tax allowance*



Rabbitcat said:


> Apparently from 1st April this year- as announced in LAST YEARS budget- anyone with income of less than £15,600 wont be taxed on savings.
> 
> Only read this today as the news was updating on various tax issues because of today's changes


Does this affect UK taxpayers living here?


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## extranjero (Nov 16, 2012)

garryg163 said:


> Does this affect UK taxpayers living here?


Yes if you've got savings in UK banks
Instead of off setting uk tax paid against Spanish tax, or claiming it back from UK, in future you will get interest gross in UK, and declare it in Spain and pay tax there.


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