A while ago, a question arose on the forum about what happens if you hold a CTD which is about to expire.
The point of a CTD is that interest on tax paid by redemption of the CTD is calculated to the date of acquisition of the CTD. The CTD however has an expiry date of 5 years from acquisition. Redeeming it at that point and buying a new one will lose the original interest stop date.
I now have in writing from HMRC that if a CTD is lodged in an HMRC account (called a SAFE account), it will be treated as a payment on account on the date the CTD was acquired. The interest protection is retained. The downside is that until your tax position is settled you are not able to withdraw any of the SAFE account value.
A payment made on an APN will be a payment on account and interest on the amount of the APN is calculated only to the date the APN is paid.
The point of a CTD is that interest on tax paid by redemption of the CTD is calculated to the date of acquisition of the CTD. The CTD however has an expiry date of 5 years from acquisition. Redeeming it at that point and buying a new one will lose the original interest stop date.
I now have in writing from HMRC that if a CTD is lodged in an HMRC account (called a SAFE account), it will be treated as a payment on account on the date the CTD was acquired. The interest protection is retained. The downside is that until your tax position is settled you are not able to withdraw any of the SAFE account value.
A payment made on an APN will be a payment on account and interest on the amount of the APN is calculated only to the date the APN is paid.
Comment