There is a quirk to the way the accounts work which can help you legally avoid paying tax on savings interest
Martin Lewis ' Money Saving Expert team has revealed a clever way to legally avoid tax using an NSandI Premium Bonds account. NSandI, the organisation that operates Premium Bonds in the UK, has introduced a new savings account, offering fixed-term bonds for two or five years, with interest rates of 4.6 or 4.1 percent.
While these may not be the best rates currently available, there is a unique feature of these accounts that can help you legally avoid paying tax on savings interest. The Personal Allowance allows you to earn £1,000 of interest on savings before you start paying tax on it, or £500 if you're a higher rate taxpayer, reports the Express.
However, with an NSandI savings account, you could arrange your finances in such a way as to minimise or even eliminate your tax liability because you can choose when the savings interest is paid.Martin Lewis' MSE team explained: "You can choose when and where to have the interest paid.
They added: "This is important if you need to pay tax on savings interest, as it's when you can access your interest that counts for tax purposes. Unlike NSandI's Premium Bonds, where any prizes you win are tax-free, interest you earn from British Savings Bonds IS taxable."
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Martin Lewis' MSE says 'do a lot better' by ditching Chase bankThe US giant has slashed its savings rates yet again - and Martin Lewis' MoneySavingExpert team says you can now 'do a lot better'
Read more »
Martin Lewis’ MSE reveals exact date to renew your car insurance for the best dealMartin Lewis reveals perfect time to renew your car insurance in tip that could HALVE costs & save hundreds on policy
Read more »
Martin Lewis' MSE issues warning to pensioners over Winter Fuel PaymentThe MoneySavingExpert.com team has issued a warning to pensioners who might miss out on the Winter Fuel Payment
Read more »
Martin Lewis' MSE urges Brits to 'fix energy bills now' with warning of hikesThe price cap for gas and electricity is set to rise in October, according to the Money Saving Expert team - and they're urging people to take steps now to offset costs
Read more »
Martin Lewis' MSE shares update as Royal Mail releases useful toolThe Money Saving Expert has urged anyone with stamps to check the new Royal Mail scanner. Here's everything it can do - and remember to make sure you're not caught out
Read more »
Martin Lewis' MSE issues warning as Brits have hours left to get free £175The online bank originally relaunched the offer back in May and said it would be around for a 'limited time only'
Read more »