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Hello all,
Why do we need to gross up building society or bank interest for the purpose of income tax calculation if they are received gross regardless of whether they fall within an indivildual’s personal allowance?
Many thanks,
MagdaUp to and including the March 2017 exam most forms of bank interest and all building society interest is received NET (not gross) of basic rate tax being deducted at source – therefore gross up at 100/80. As per chapter 2 of notes there are some types of interest received gross, for example on government securities which is taxable and other forms received gross that are exempt, for example ISA’s. They must be learned
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