IslamicFinance.de

Fixed term deposit accounts, which pay an “expected profit rate” instead of interest, beat the best fixed rate bonds when it comes to earnings. HM Revenue & Customs (HMRC) confirmed that profits from Sharia accounts would count towards the personal savings allowance. Where returns are the economic equivalent of interest (and meet certain other criteria) they are taxed as if they are interest - and will be included within the definition of savings income, according to HMRC. This means Sharia compliant savers will be able to take advantage of the new £1,000 tax free interest earnings allowance if they are a basic rate taxpayer (£500 for higher rate taxpayers).