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Where Taxpayers and Advisers Meet

can someone help me about personal tax about saving starting rate

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm
Re: can someone help me about personal tax about saving starting rate

Postby robbob » Mon Jul 17, 2017 8:48 pm

Hello Loza

5000 @ nil = nil (because there is no non savings income)
500 @ nil = nil (because the OP is a HR taxpayer, so does not get the 1000 allowance)
23,500 @ 20% = 4,700 (the standard rate for savings)
4700 @ nil (below 5000 so exempt).

I cannot see any advantage in re allocating the PA away from the norm, ie NS/Sav/Div, I think the difference between us is your calculation of the NRB savings allowance at 20%, I would suggest that should be nil.
Thanks for adding your thoughts.

I agree 100% with your calcs - the 1k difference you mention was due to the fact i had only posted the wrong online package calcs which i knew were out by 1k and not what i thought the answer would be.

Note i did stop in my tracks at the time (hence the pizza break) with regard to whether the OP would qualify for the 1k nil band rather than £500 as there was no higher rate tax charged, however the lack of higher rate tax paid doesn't alter the fact that the dividends charged at Nil still count for higher rate tax purposes !!! - this in itself brings up another question though in that the marriage allowance claim on my calculator seems to allow a marriage allowance claim if the income is over 43k but none of the excess is actually taxed at higher rate - hmmmmmmmm

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: can someone help me about personal tax about saving starting rate

Postby Deidre22 » Sat May 05, 2018 1:32 am

Hello, newbie here and this thread seems to be suitable place for my query. Due to change in circumstances I am now liable to tax again from the year 2018-19 onwards due to my savings interest. Can anyone help me work out how much tax I'll owe for 2018-19 for the following income. I am confused as now there is the 1000 tax free allowance on first 1000 of savings interest as well as the starting rate of 0% on first 5k of savings interest and I don't understand which of these you take into account first. My taxable income this current year will be as follows...

Occ. Pension 5051
P/T Earnings 4783
Total Savings Interest 4576

Many thanks. :-))

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: can someone help me about personal tax about saving starting rate

Postby robbob » Mon May 07, 2018 3:14 pm

Hello Deidrie

Potentially you get up to 6k of tax free interest ON top of your personal allowance - being the 1k and the 5k - so thats a big fat whoooohooo in your case :).

One easy test to confirm that you get the full 5k bit that could be restricted is that if your total income doesn't exceed the personal allowance level + 5k then you get the 5k in full + the extra 1k (which is only restricted for higher rate taxpayers)

You can also use any unused bit of the personal allowance with interest income before you start on the 6k.

so if we take scenario where you have swapped your 10% of the personal allowance to your partner for the year just finished - you would have reduced pa of £10,350

your total income is £14,410 - which is less than pa +5k so no restrictions

earnings/pension 9834 covered by pa
interest 516 - covered by pa
interest 4060 covered by 5k starting rate of Nil (tax free)
Memo you would also have the 1k of pesronal savings allowance if needed - ie you could have had another 1940 of interest in total without paying any tax.

Ps if you are married and your spouse is paying tax and not higher rate taxpayer you should swap marriage allowance bit over to them if not already done.

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: can someone help me about personal tax about saving starting rate

Postby Deidre22 » Mon May 07, 2018 5:39 pm

Many thanks for reply, there is no swap of allowance to any partner in my scenario. So no tax to pay in 2018-19 at all? whoooohooo indeed! :)

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: can someone help me about personal tax about saving starting rate

Postby Deidre22 » Mon May 07, 2018 5:52 pm

robbob, could you redo those figures for me with the full personal allowance of 11850 so I can get my head around it better!? Ta. :D

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: can someone help me about personal tax about saving starting rate

Postby robbob » Tue May 08, 2018 10:00 am

earnings/pension 9834 covered by pa
interest 2016 - covered by pa

interest 2560 covered by 5k starting rate of Nil (tax free)

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: can someone help me about personal tax about saving starting rate

Postby Deidre22 » Tue May 08, 2018 10:58 am

Thank you robbob. Happy days! Hope this starting rate of Nil on first 5k is not abolished any time soon!

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: can someone help me about personal tax about saving starting rate

Postby robbob » Tue May 08, 2018 7:39 pm

Hope this starting rate of Nil on first 5k is not abolished any time soon!
Anything is possible/probable/going to be necessary if they are gonna give away 10k cash per millenial for the fun of it - life is sooooo tough for millenials and all that.

Deidre22
Posts:9
Joined:Sat May 05, 2018 1:14 am

Re: can someone help me about personal tax about saving starting rate

Postby Deidre22 » Tue May 08, 2018 8:02 pm

:lol:


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