legally who's interest is it?

[Jevs]

Hi,

I recently went through a lump sum IVA which was approved in November. The total lump sum was paid over to the IP in January but it has taken until now to get the amount paid out to the creditors.

I recieved a letter from my IP stating that I needed to be aware of eth tax on the interest that has been generated on the money whilst it has sat in the IP's account. I asked if I was tehrefore due back teh interest payment (about £220) to which they laughed and said no.

Is this true - legally who's interest is it? and if it's not mine why am I being told to make the taxman aware of it?

[MelanieGiles]

Hi Jevs and welcome to the forum

The interest belongs to the creditors, unless your proposal provides otherwise, but technically as the interest is additional income you would need to take this into account for tax purposes.

Given the amount involved, sledgehammers and nuts spring to mind!