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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have just received a cheque for £15,700 which is the amount

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I have just received a cheque for £15,700 which is the amount of my grandmothers life assurance as I am the beneficiary. I am on working family tax credits as work part time and on low income. I have no idea how this is going to affect me and what I should do as I was never expecting this amount to be as much. They have enclosed a certificate of deduction of income tax and this amount was deducted and paid to the tax office so do I need to do anything else. What should of come as a nice surprise has suddenly thrown me into turmoil.
Submitted: 9 months ago.
Category: UK Tax
Expert:  Tony Tax replied 9 months ago.
Hi.

Can you tell me me what the gross, tax and net figures on the certificate of deduction of income are please.
Customer: replied 9 months ago.

 


Nature of payment: Interest
Gross Interest: 2,997.00


Income tax deducted: £599.40


Net Payment: £2,397.60


 


The above is interest as my grandmother died 12 years ago and the policy was left unclaimed.


The basic claim value is: £12, 760.14 which hasn't been taxed.

Expert:  Tony Tax replied 9 months ago.
Thanks.

Take a look here for information on what should be included in a tax credit renewal form.

You will need to disclose the interest payment in your tax credit form for the year in which it was paid to you. You can exclude the first £300 of income you receive from investments or savings but this income may be regarded by the tax credit office as "miscellaneous income" in which case, you should not deduct £300. See under the heading "What you should include as other income". If I were you, I'd call the tax credit office for clarification. Any interest you earn from depositing the money should be included less the first £300.

The balance of the payment is capital and is not taken into account for tax credit purposes.

i hope this helps but let me know if you have any further questions.
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14103
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
Tony Tax and 4 other UK Tax Specialists are ready to help you

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