sostupid

And yet again you don't answer the question which was, 'On opening the account I have the option to have the interest paid into a different account or to have it reinvested. Does having that option mean the interest is taxed annually even if I opt to have it reinvested and cannot access it until it matures?' I need to know which option I should choose when I open a new account next week. Less importantly, I pointed out that SAIM2400 says, "The word ‘arising’ ... was held to include the ‘swelling of a person’s assets’ even where the person had no immediate right to the income." So how does that match what you say? HMRC need to clarify the whole situation - surely any reasonable person would assume that interest is paid when it appears in their account, and HMRC should work on those lines.

Dear HMRC Admin 32, Please, why can't you read our questions fully and answer them properly? If constantly giving the same partial answer clarified the matter we wouldn't have to keep asking variations of the same question. It would also save you time, and I expect a deal of frustration on your part too, if you gave us just one full answer covering all the options rather than endlessly repeating yourself. In particular - On opening the account I have the option to have the interest paid into a different account or to have it reinvested. Does having that option mean the interest is taxed annually even if I opt to have it reinvested and cannot access it until it matures? I'm not even sure it's right that I "need to report it" if I can access the interest on an annual basis, as if I can then I, having so little income, wouldn't have to pay tax on it. Anyway, wouldn't my provider inform you? I've never told you about savings interest before, but you seem to know how much I receive. Thank you.

HMRC Admin 25 wrote, "This would suggest that you have access to any interest on an annual basis and should therefore be reported annually: SAIM2400 - Interest: taxation of interest: the tax charge Thank you. " Sorry but that makes absolutely no sense to whatsoever. What do you mean by "This"? The info in the link or what I wrote, and if the latter in which of my comments/questions? And it's not terribly helpful to link me to a page I quoted from and that clearly hadn't answered my question in the first place. Can we have an actual definitive answer please?

steveinkelso, Thanks for that, it gives me some hope at least. My concern is still that if the Coventry's is a universal approach, why is there all this debate in the first place - I don't recall having a long term fix that didn't offer to pay out the interest to another account but perhaps it happens. And if it's down to an agreement between HMRC and each different provider, why couldn't my provider tell me the situation - surely they would know. HMRC's own advice seems contradictory. SAIM2400 says "The word ‘arising’ ... was held to include the ‘swelling of a person’s assets’ even where the person had no immediate right to the income." The interest, shown on each annual statement, would presumably 'swell my assets' as it would be part of my estate should I die. SAIM2440 says, "Interest has been made available if it is credited to an account on which the account holder is free to draw." but then muddies the water with, "if a taxpayer does not actually receive interest (or have it credited to an account) until a later date, it does not normally form part of his or her taxable income until it is received." Why 'Normally'? All this confusion could be ended if the HMRC page "SAIM2440 - Interest: taxation of interest: when interest arises When does interest arise?" had an Example 4, showing what happens in the case we're all asking about. That it doesn't perhaps suggests that it's not as simple as we'd hope. I'm looking forward to HMRC's reply to my original question.

Clutching at straws here, but if a 5 year bond gave you the choice [either at the start or, for future interest payments, during the course of the bond] of having the interest paid into another account or back into the bond, does that count as having access even if you chose the reinvestment option? I have seen comments on this where choice has been discussed as if having the choice was the important thing and not what choice was actually taken, but that doesn't necessarily mean they were correct. Thanks.