Do you need to worry about tax on your savings and investments?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 2 December 2022

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

Many people have not had to worry about paying tax on their savings and investments for some time.

The advent of the £1,000 personal savings allowance combined with savings rates near record lows meant basic rate taxpayers would need big cash pots to incur 20 per cent tax on their interest.

Meanwhile, even higher rate taxpayers with their lower £500 personal savings allowance needed reasonably large cash pots to pay 40 per cent tax on their interest.

Many investors also didn't need to worry too much about capital gains tax, with a tax-free allowance of £12,300 per year.

But things have changed: rising savings rates and fiscal drag pulling more people into the higher rate bracket mean that many more savers will now have to pay tax on interest - while Jeremy Hunt's tax raid on investors will see the capital gains tax allowance slashed to £6,000 and then £3,000.

So do you now need to worry about tax on your savings and investments and what can you do? Georgie Frost, Tanya Jefferies and Simon Lambert dive into the world of savings and capital gains tax on this podcast.

Unsurprisingly, the benefits of an Isa feature strongly, as do some other tips and a discussion of what this means for buy-to-let landlords and second home owners.

Plus, there is a special guest podcast appearance from our pensions columnist Steve Webb to talk through a major victory for someone told by the DWP they were owed much less from a delayed state pension than they actually were - and an update on pension credit.

And finally, has the used car price boom come to an end? Simon talks us through why some second hand cars - including popular electric ones - have seen their prices drop.

Transcript

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0:00.0	Welcome to This Is Money Podcast. I'm Georgie Frost and joining me and editor Simon Lambert today is Pensions and Investments Editor Tanya Jefferies and special guests to Steve Webb.
0:12.3	And coming up, do you need to be worried about capital gains tax and tax on your savings as well?
0:18.4	The team uncover another shocking state pension era.
0:22.3	And is this it for the used car price boom?
0:25.6	Don't be getting to step to date with all the latest breaking money news.
0:28.2	Just go to this ismoney.co.uk or download the app.
0:32.2	Market updates and conversations around the financial world don't have to be boring.
0:36.5	The Digest and Invest podcast by E-Toro is a great way to tune into what's happening in a fun
0:41.2	and easily digestible format.
0:43.5	Discover the Digest and Invest podcast at E-Toro.com forward slash academy forward-slash podcast.
0:49.0	But first, capital gains tax is what you pay on the profit you make from assets, such as from shares to second homes, buy to let properties, and personal possessions.
0:59.2	Your main home is exempt and you get a chunky annual tax-free allowance of £12,300 for now.
1:06.1	So merely a concern for the wealthy? No? The Chancellor announced big changes in his recent autumn statement,
1:12.1	which means that the likes of you and I are likely to have to pay up. So, Simon, welcome.
1:19.4	What is that clear as capital gains tax? Has it work? Who pays it? Capital gains tax is a tax
1:24.4	that you pay on the profits that you have made on certain assets. So anything
1:29.7	basically that you buy with the intention of investing in it or it going up in value, really,
1:39.1	unless it's counted as something called a wasting asset, and in which case it doesn't have CGT on it unless and there
1:48.9	is actually quite a big caveat here that people forget you are regularly buying and selling this thing
1:56.9	and therefore HMRC might decide that actually you are doing this in order to profit,
2:04.0	trade, whatever you want to call it. So if you buy a car and the car goes up in value and you
2:11.3	sell the car, you don't have to pay CGT. The most likely scenario is a classic car. There are people out there, including people I've
	...

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