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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3823
Experience:  FCCA FCMA CGMA ACIS
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Hi, I invested in a one year term deposit but had to withdraw

Customer Question

Hi, I invested in a one year term deposit but had to withdraw from it after 7 months incurring an early redemtion charge which reduced my 'profit' from this investment ....do I pay tax on the net income including the early redemtion charge or the raw interest earned.
Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Your deposit taker will deduct tax on the income paid out rather than the income earned. Thus you taxation will be confined to to the former as opposed to the latter. Be careful to disclose the correct figure in your annual self assessment tax return.

I do hope I have been able to be of assistance.
Customer: replied 3 years ago.
Because of the amount I pay the tax and not the bank ...for the avoidance of doubt I pay tax on the interest earned minus the redemption charge ...ie happy! Please advise
Expert:  bigduckontax replied 3 years ago.
The redemption charge reduces the income for tax purposes; you only declare the net sum involved.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.
Customer: replied 3 years ago.
I don't understand why the system wants me to reply to your closing message thanking me for thanking you....are we in an infinite loop? .....if so let's say we won't respond to each other anymore ...cheers, Roger
Customer: replied 3 years ago.
Now go away you annoying bore
Expert:  bigduckontax replied 3 years ago.
I have tried, but it's just come bouncing back this minute, sorry! Just Answer can be a bit of a pest this way.

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