Tax on Savings 2008/9-2009/10

merlinthehappypig wrote: »

I'd imagine that if your sole income is from savings then you would get the interest paid gross anyway so not a case of claiming it back. The 10% band has been discussed a little further down in the income from £170000 thread.

would be unusual whilst not impossible for someone to have sole income as savings, most will at least have some form of pension which counts towards assessable income, in that event while some or all savings may well be tax free. a lot of people will fall into pension + savings income = up to personal allowance with rest of savings income taxable and therefore either needing to be paid or claimed back.

Hungerdunger wrote: »

Can someone explain this for me? I thought that you could only have interest paid gross if the amount of interest was likely to be under the tax threshold.

absolutely correct, someone can of course get interest paid without deduction of tax up to their personal allowance on some savings accounts and then if appropriate pay tax on other savings accounts to which again if appropriate then claim back the overpayment of unearned savings tax.

of course its not possible for one savings account to pay part gross/10% rate/net rate.

bristolleedsfan wrote: »

would be unusual whilst not impossible for someone to have sole income as savings, most will at least have some form of pension which counts towards assessable income, in that event while some or all savings may well be tax free. a lot of people will fall into pension + savings income = up to personal allowance with rest of savings income taxable and therefore either needing to be paid or claimed back.

I appreciate that, but the 10% band appears to be only available if your sole income is from savings. If you have a pension as well, then the 10% band isn't going to be available, so it seems. The OP's question was about the 10% band, not about whether or not interest can be paid gross.

It is a little confusing, though, as there doesn't seem to be much available about this 10% and how it applies.

I have a pension and savings, so don't think that I will get the 10% band. My wife just has savings so she will get it, it seems.

We try to keep her interest just under the personal allowance each year by using accounts creatively, but it will catch up with us eventually!

I think the way it works is you will get the 10% unless you have income that fills the band.

so if your income exceeds the personal allowance, then the 10% band reduces for every pound over the personal allowance.

if your income is less than the personal allowance, then you use the savings to fill the rest of the personal allowance, and the 10% band

merlinthehappypig wrote: »

I appreciate that, but the 10% band appears to be only available if your sole income is from savings. If you have a pension as well, then the 10% band isn't going to be available, so it seems. The OP's question was about the 10% band, not about whether or not interest can be paid gross.

It is a little confusing, though, as there doesn't seem to be much available about this 10% and how it applies.

I have a pension and savings, so don't think that I will get the 10% band. My wife just has savings so she will get it, it seems.

We try to keep her interest just under the personal allowance each year by using accounts creatively, but it will catch up with us eventually!

reference to "pension" was responding to apparent fact that very few people will be living "solely on savings income"


gross interest status is available to people who have a pension and savings income that does not exceed someones personal allowance so once the personal allowance is exceeded can someone give a definitive answer as to whether they would then be entitled to 10% savings tax rate up to the amount allowable for this tax band if they have both a pension and savings income ?