Payments on account, APN's, Certificates of Tax Deposit

[happychap]

CTDs interest

You only receive interest on a CTD if you take one out over £100k anything less you don't gain interest how ever you do offset the interest on your bill 😀

Everything I've read over the years say CTDs offer indefinite protection from interest charges for as long as you hold them. In other words, they have the same effect as paying on account.

The 6-year limit is only for interest paid out if you cash them in rather than using them to pay a tax bill.

[DonkeyRhubarb]

Everything I've read over the years say CTDs offer indefinite protection from interest charges for as long as you hold them. In other words, they have the same effect as paying on account.

The 6-year limit is only for interest paid out if you cash them in rather than using them to pay a tax bill.

[centurian]

Do you have a reference for that - not saying you are wrong, but there is absolutely no hint of that in either of these official resources. In fact they seem to infer the opposite.

Payment methods: payment by certificates of tax deposit

https://www.gov.uk/certificate-of-tax-deposit-scheme

You can leave your deposits beyond 6 years but no interest will be paid after that.

[webberg]

Do CTDs expire. I didn't think they had any expiry.

There is a point at which you no longer earn any more interest from the CTD (not that you earn much anyway these days), but I thought the CTD could be retained indefinitely.

They have a 5 year life. It is not possible to "roll over" a CTD which means that the interest protection may be lost if the CTD expires.

[centurian]

Do CTDs expire. I didn't think they had any expiry.

There is a point at which you no longer earn any more interest from the CTD (not that you earn much anyway these days), but I thought the CTD could be retained indefinitely.

[webberg]

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.