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Taxation of savings income


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns

Taxation of savings income


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns
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Savings income includes interest, profits from deeply discounted securities, accrued income profits and chargeable event gains.

Savings income is taxed after non-savings income but before dividend income. There are four possible rates of tax applying to savings income from 2015/16 onwards: 0%, 20%, 40%, or 45%.

Note that the Scottish and Welsh income tax rates only apply to the non-savings non-dividend income (commonly referred to in practice as non-savings income) of Scottish or Welsh taxpayers. As far as the savings income of Scottish and Welsh taxpayers is concerned, it is the UK tax bands and rates that apply. For the definition of Scottish and Welsh taxpayers, see the Proforma income tax calculation guidance note.

When is savings income taxable?

Whether savings income is taxable in the UK depends on the circumstances of the individual and whether the income is paid by a UK resident or non-resident payer.

Generally, an individual who is UK resident is taxable on their worldwide income (and gains) in the tax year in which these are received and should declare these on

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  • 22 Apr 2025 10:20

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