Tax On Interest Earned

[Guest Martin and Val]

Hi,

Can anybody tell us what rate of tax you pay on any interest earned on investment money and is this taxed at source or do you have to declare your interest on a yearly tax return?

Many thanks

Martin and Val

[Guest sarahsmartiepants]

when you fill in the tax return at the end of the year you have to declare all your earnings, interest included. I am sorry I dont know the % you pay though

sarah

[Guest Guzzler&Sas]

Hi,

 

Like SSP you include it in your earnings for the year and your bank will already have informed the tax office of how much interest you have received:nah:, I am sure the rate of tax will depend on overall level of income,

 

Guzzler

[Andrew from Vista Financial]

Hi Martin and Val.

 

When you say Investment earnings, do you mean deposit savings accounts i.e Interest paying bank accounts/savings accounts etc. or are you referring to asset backed investments i.e shares, stocks etc. I take it you do mean in Australia?

[Rachiegarlo]

If the interest is credited to you and not reinvested on your behalf, then it is added to your income amount. At the end of the financial year after June 30, you will have to declare this as income on your tax return. After all tax deductions and expenses have been removed from the total amount, this is your taxable income. Currently you are allowed to earn the first $6000 tax free, then upto around 20,000 you are taxed at 20%. Then you are taxed at 30% upto $70,000ish. Above this you are taxed at 42-45%.

[Guest Martin and Val]

Hi,

Thanks for all the info this is just what we wanted to know.

(Andrew, sorry, yes we did mean savings and investments)

Many thanks

Martin and Val

[Andrew from Vista Financial]

Hi Martin & Val

 

Pretty much as mentioned above, the rates for the new tax year 01/07/08 are as follows:

 

-$0 - $6k = $0

>$6 - $30 = 15%

>$30 - $80 = 30%

>$80 - $180 = 40%

>$180k = 45%

 

medicare is 1.5% of total taxable income in addition, which most people have to pay.

 

Dividend income from shares are different, most dividends are received franked at company rates (30%) so you may have, no further, an additional or a refund of tax dependant on your marginal tax rate.

 

Like the UK monies can be invested in the lower earners name for a lower tax liability.

 

Hope this helps guys.

 

Andy

[Guest Martin and Val]

Andrew,

Many thanks for that mate.

Cheers

Martin and Val