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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am considering taking out a 2 year bond with axis bank £75000

Customer Question

I am considering taking out a 2 year bond with axis bank £75000 for my wife and £75000 for me axis bank pay 2% gross and don't deduct the tax.Two questions is my money safe with axis and how much tax do I put aside.My wife earns less than £11000 and I pay tax on my pensions.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Axis Bank, formerly UTI Bank, is the third largest private bank in India and it has a substantial international presence. Its UK subsidiary is Axis Bank UK Ltd. The original organisation dates from 1993. Remember the rules change from the 16/17 tax year. Here is The Telegraph's summary of the position: 'The new allowance grants every basic-rate taxpayer £1,000 of savings income free of tax, with higher-rate taxpayers receiving a £500 allowance. (Additional-rate taxpayers on the top 45pc rate won’t receive an allowance at all.).' From the tenor of your question you will receive GBP 1500 pa interest so 500 of that would be taxable in your hands so put aside 100 quid. You could consider Premium Bonds (PBs) as a tax free alternative for some of your savings, PBs are a tax free environment although the prize pool has been recently reduced. Also cash ISAs are also tax free. All UK deposit takers will pay interest tax free from 6 April 2016. I do hope that my reply has been of assistance..
Customer: replied 1 year ago.
Will my wife be tax free0
Expert:  bigduckontax replied 1 year ago.
Well, yes and no; it all depends upon her income level. If she remains a basic rate tax payer then the rule I first quoted would apply. If she remains below the personal Allowance threshold, currently 10.6K then all could be tax free.

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