If you’re a taxpayer and you get income from an investment (including interest from a savings account) you’ll normally have to pay tax on it, although the chances are it’ll be deducted before the payment reaches you.

If you’re not a taxpayer you may not necessarily be off the hook. You’ll need to check that your investment income doesn’t turn you into a taxpayer – careful planning can help you avoid this.

Income from the following is generally taxed at source and so treated as though basic rate income tax has already been paid:

• The interest on your savings accounts
• Share dividends
• Income from a unit trust and similar funds
• UK life insurance investment bonds
• UK life insurance with-profits bonds

This means that unless you are a higher rate tax payer, there should be no more income tax to pay. Income from gilts (Government bonds) is usually paid in full without any tax deducted, but is still taxable.

Products on which income tax is not payable include:

• Investments held within an ISA (Individual Savings Account)
• National Savings certificates

Please be aware that tax rules may change in the future.