The taxable amount you pay on savings income depends on your income tax bracket.
Introduced in 2016, new government rules mean that savings, which include investment bonds, are taxed subject to the following criteria:
- Basic rate taxpayers are able to earn £1000 in savings interest tax free
- Higher rate tax payers are able to earn up to £500 savings interest tax free
- Additional rate tax payers will not receive a personal savings allowance
Savings income above your Personal Savings Allowance threshold is then subject to your respective tax rate.
Other savings vehicles, such as interest earnt in cash, stocks and shares ISAs does not count towards the Personal Savings allowance limit, as long as it is under the £20,000 limit as of 2017-2018 tax year.
SynerGIS is an approved ISA manager, HMRC reference number Z1766, of Cash and Stocks & Shares ISAs. The SynerGIS ISA Bond is tax efficient for up to £20,000. Anything over the £20,000 limit, or indeed, a consolidation of other ISA shielded investments, will be subject to your Personal Savings Allowance restrictions.