Ask a tax advisor on the topic of Tax return

Interest rates on building society contracts

May 29, 2016 | 25,00 EUR | answered by Oliver Burchardt

Dear Sir or Madam,

I have a question regarding the disclosure of a building savings contract or the interest rates.

Here are some key points: the interest rates are low, i.e. they are well below the tax-free allowance, there is no deposit into the building savings contract and it is noted as "exempt from capital gains tax".

1.) Is there an obligation to disclose the contract or the interest rates?
(Otherwise, I am liable for church tax.)

Thank you very much!

Oliver Burchardt

Dear inquirer,

Thank you for your inquiry, which I am happy to answer as part of an initial consultation.

Due to the withholding tax, there is no longer a requirement to separately declare capital gains in the tax return. An exception only exists if church tax has not yet been deducted from the income subject to withholding tax.

However, it may still make sense to declare interest income. If your personal average tax rate is below 25% and you have earned more than the tax-free allowance in capital income, you should declare the received capital income and request that the taxation be done at your personal average tax rate.

Best regards,

Oliver Burchardt
Tax consultant