Savings interest arising (UK income tax)
Taxable savings interest is generally charged for the tax year in which it arises. Interest normally arises when received or credited and available to the individual; the exact terms of a restricted account and other special cases can affect timing. Interest inside a qualifying tax-exempt ISA is considered separately from taxable savings income.
Worked example
An individual’s accessible ordinary savings account is credited with £250 taxable interest on 1 April 2026. Assuming it is immediately available and no special rule applies, the interest arises in 2025–26 and is included in that tax-year income calculation before relevant allowances and nil-rate bands.
Common mistake
Including interest merely because it accrues during a year when it has not arisen, or treating tax-exempt ISA interest as taxable savings income.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Supporting | June 2026–June 2027 |