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Where Taxpayers and Advisers Meet

tax on interest from foreign savings

simoncree
Posts:6
Joined:Fri Jan 15, 2021 9:44 am
tax on interest from foreign savings

Postby simoncree » Thu Jun 03, 2021 9:12 am

Hello,

I have a savings account from the IOM accruing this year, I know I have to pay tax as income on the interest but is there a rule about how long you were resident in the UK before the interest is taken?

I had a 5 year savings account but was non resident for 3 of those years then moved back to the UK for the last 2

If the interest is treated as income can I use that as part of my contribution to my SIPP?

Thanks in advance

Jholm
Posts:184
Joined:Mon Mar 11, 2019 4:22 pm

Re: tax on interest from foreign savings

Postby Jholm » Thu Jun 03, 2021 9:44 am

If you are UK resident, then your worldwide income is considered for tax, so the interest would be taxable in the UK any years resident. Double taxation relief may be available if you suffer overseas tax.

You will have a personal savings allowance at 0% on the first £0/500/1000, depending on your highest rate of tax.

Interest is not considered 'relevant earnings' for pension purposes. You can contribute £3,600 gross in each year as a minimum without being subject to tax charges, unless your relevant earnings are higher than this amount.

simoncree
Posts:6
Joined:Fri Jan 15, 2021 9:44 am

Re: tax on interest from foreign savings

Postby simoncree » Thu Jun 03, 2021 10:23 am

Thanks for the information JHolm its very useful


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