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March Questions and Answers
Newsletter issue – March 2026
Q: Are Premium Bonds a tax efficient way of saving?
A:Premium Bond prizes are always tax-free, including large wins such as £100,000 or £1 million.
This makes them appealing for people who have already used tax-free allowances like ISAs or the personal savings allowance.
However, you would need to invest £10,000 to earn the average 3% rate of return. As most prizes are small, big wins are rare, and you could have bad luck and win nothing.
Please get in touch with us to discuss tax efficient ways of investing your money.
Q: My father paid capital gains tax when selling our family home despite not living there (he still paid the mortgage). Shouldn't the sale have been covered by his private residence relief?
A:Capital Gains Tax (CGT) on the sale of a property is based on legal ownership and actual occupation. In order to qualify for private residence relief (PRR), your father would need to be the registered owner of the property and have lived there as his main residence for the entire period of ownership.
PRR is not based on the family continuing to live there. Once he moved out and no longer occupied the home as his main residence, your father's eligibility for relief stopped. It would be considered as a second property for the purposes of his CGT calculation.
Q: I've used up my ISA allowance - is it worth putting money into a CITR savings account?
A: There are 33 account providers accredited to use Community Investment Tax Relief (CITR), mostly offering investment opportunities but one does offer a savings account.
Your deposited money would be used to support charities and social enterprises and would be locked away for several years before you can make any withdrawals.
Whilst the interest earned is very low (and is taxable), and could possibly be zero depending on movements in the Bank of England base rate, this account offers a tax relief of 5% on three quarters of the money you put in. You must claim this through a self-assessment tax return.
Depending on how much you have to deposit and how readily you might need access to it, it may be better to put your cash into a regular savings account and pay the tax on the interest. This CITR account only really comes into its own if you have a large sum to save.
Please get in touch to discuss your options with us.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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