Even the simplest of investments can be a lot to get your head around at first – we understand that.
Most of us focus on learning the risks and rewards on offer and, whilst that’s a great place to start, it’s really important that you don’t forget about tax. As with all income, you may have to pay tax on the returns you earn from your investments.
Thankfully, it’s not as difficult as you might think!
Here’s our quick guide to managing tax for your Kuflink investments…
You Have A Personal Allowance
Thanks to your Personal Savings Allowance, you may not need to pay any tax at all on your investment income. The amount of allowance you have depends on your income tax bracket:
Basic rate tax payer – £1,000
Higher rate tax payer – £500
Additional rate tax payer – £0
This means that if you are a basic rate tax payer, you could earn up to £1,000 in interest from your Kuflink investments before you need to start paying tax.
Earned More Than Your Allowance?
Clever you! For the income you do need to pay tax on, the following amounts will apply:
20% income tax if you are a basic rate taxpayer
40% income tax if you are a higher rate taxpayer
45% income tax if you are an additional rate taxpayer
Our Innovative Finance ISA Pays Tax-Free Returns!
Kuflink’s IF-ISA lets you use your annual ISA allowance to invest in peer to peer opportunities and earn up to 7% interest pa*, completely tax free. For the 2019/20 tax year, that means you can invest up to £20,000 and keep every penny you earn!
Ultimately, your tax liabilities are dependent on your individual circumstances. All investments are subject to HMRC requirements and if you are in any doubt as to your responsibilities, you should seek independent advice.
*Capital is at risk, not covered by the FSCS.