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HMRC internal manual

Savings and Investment Manual

Savings and investment income: tax exempt savings

Certain types of savings and investment income are exempt

Part 6 of ITTOIA05 (‘Exempt Income’) lists a number of types of income thatare ignored for income tax purposes. Most (though not all) of the exemptions listed inPart 6 are types of savings and investment income. The exemptions are as follows.

  • Certain types of income from National Savings and Investments (NSI).
  • Income from individual investment plans, such as PEPs and ISAs.
  • Income from savings related share option schemes (SAYE).
  • Venture capital trust (VCT) dividends.
  • Income from FOTRA securities.
  • The exempt capital element of purchased life annuities.
  • Certain types of annual payments.
  • Certain types of other income.

Income arising on the money and investments in a Child Trust Fund account is alsoexempt from tax.

Further guidance

See SAIM2300 for more details on tax exemptions for interestarising on National Savings, PEPs and ISAs, and SAIM2320 on taxexemptions for interest from other sources. See SAIM1180 formore on FOTRA securities.

See SAIM8000 for more on annual payments.

See the Capital Gains Manual CG57600 for more on the capital gains tax treatment of PEPsand ISAs.

See the Venture Capital Schemes Manual (VCM) for more on venture capital trusts, and theInsurance Policyholder Taxation Manual (IPTM) for more on purchased life annuities.

HMRC web pages

Guidance is also available in a number of web pages on the HMRC website () on a number of theseforms of savings and investments. Note in particular the web pages on

  • Taxback
  • National Savings and Investments
  • Bank and building society interest
  • Savings Related Share Option Schemes (SAYE)
  • Individual Savings Accounts (ISAs) and Personal Equity Plans (PEPs)
  • Venture Capital Trusts
  • Child Trust Funds.