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  • FIRST POST
    • talexuser
    • By talexuser 13th Mar 17, 1:21 PM
    • 2,263Posts
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    talexuser
    How to pay zero tax on £100k savings - even if you're a higher earner
    • #1
    • 13th Mar 17, 1:21 PM
    How to pay zero tax on £100k savings - even if you're a higher earner 13th Mar 17 at 1:21 PM
    How to pay zero tax on £100k savings - even if you're a higher earner article today:
    http://www.telegraph.co.uk/investing/bonds/pay-zero-tax-100k-savings-even-higher-earner/

    Unless I'm mistaken those on 25k and 50k a year are in fact actually paying tax on savings.

    So a higher earner in the eyes of the Telegraph is someone on 10k a year who can take advantage of the personal allowance, starting savings allowance and low interest rates.

    Thanks for the revelation.
Page 1
    • Dazed and confused
    • By Dazed and confused 13th Mar 17, 1:38 PM
    • 1,752 Posts
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    Dazed and confused
    • #2
    • 13th Mar 17, 1:38 PM
    • #2
    • 13th Mar 17, 1:38 PM
    Not the greatest bit of journalism! Content completely contradicts the headline
    • jimjames
    • By jimjames 13th Mar 17, 1:42 PM
    • 12,088 Posts
    • 10,532 Thanks
    jimjames
    • #3
    • 13th Mar 17, 1:42 PM
    • #3
    • 13th Mar 17, 1:42 PM
    Agreed, headline is not any reflection of the article content.


    However, it is entirely possible to have S&S ISAs and pay no tax on any earnings from them on amounts substantially above £100k. Unlike cash ISAs they are still worthwhile and can use the same investments inside or outside the tax wrapper.
    Also means you can still use your £500/£1000 interest allowance for the cash emergency funds in current accounts and regular savers.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Dazed and confused
    • By Dazed and confused 13th Mar 17, 1:47 PM
    • 1,752 Posts
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    Dazed and confused
    • #4
    • 13th Mar 17, 1:47 PM
    • #4
    • 13th Mar 17, 1:47 PM
    Is this really news though. ISAs have been around donkeys years and the savings/dividend allowance aren't exactly new
    • masonic
    • By masonic 13th Mar 17, 2:01 PM
    • 9,126 Posts
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    masonic
    • #5
    • 13th Mar 17, 2:01 PM
    • #5
    • 13th Mar 17, 2:01 PM
    Perhaps the Telegraph could run an article tomorrow helpfully advising people of another way to ensure they pay zero tax on [interest from] 100k of savings - put it in an account with an interest rate of 0%.
    • kidmugsy
    • By kidmugsy 13th Mar 17, 3:36 PM
    • 9,665 Posts
    • 6,422 Thanks
    kidmugsy
    • #6
    • 13th Mar 17, 3:36 PM
    • #6
    • 13th Mar 17, 3:36 PM
    £50k to Premium Bonds. £40k to high interest current accounts and regular savers to generate about 2.5% p.a. on average, plus some money off your bills (Santander 123), £3 p.m. ex Halifax reward, and vouchers from M&S.

    And for the other £10k: dunno. Use ISAs? How about a P2P Isa? LISA?
    • Snakey
    • By Snakey 13th Mar 17, 8:56 PM
    • 1,000 Posts
    • 1,219 Thanks
    Snakey
    • #7
    • 13th Mar 17, 8:56 PM
    • #7
    • 13th Mar 17, 8:56 PM
    Havin't followed the link but those kind of articles always conveniently assume you have a non-earning spouse and have done absolutely nothing about tax-efficient saving at any time in the past.

    A bit like the diet articles where they headline "ten simple swaps will lose you five stone in a year without you realising" and inside it's a list of things like "instead of having a hot chocolate with whipped cream and a 200g bar of Dairy Milk, why not try black coffee and an apple? CALORIE SAVING: 875 PER DAY"

    In which case, my entry for the 2017 Stating The Bleeding Obvious Award (Sub-category: Pay No Tax On Your Savings in 2017/18) is as follows:
    £15,240 into an ISA at 11:55pm on 5 April. Ditto wife.
    £20k into an ISA at 12:05am on 6 April. Ditto wife.
    (The headline for the above could be something like "how to shelter over £70k from the taxman in just ten minutes with this one clever trick", perhaps with a sub-heading like "Philip Hammond hates her - single Mom discovers simple way to get TAX FREE CASH")
    The remaining £30k-ish into a variety of interest-paying current accounts (conveniently assuming this couple has one million available direct debits and so on) feeding in to a like amount of regular savers, all of which are opened on 7 April therefore not maturing until the following tax year. The interest earned this year in the current accounts will be covered by the exemption.

    Or there's always the Keep It Simple, Stupid method: die on 5 April. Any Takers?
    • Keep pedalling
    • By Keep pedalling 13th Mar 17, 10:45 PM
    • 3,742 Posts
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    Keep pedalling
    • #8
    • 13th Mar 17, 10:45 PM
    • #8
    • 13th Mar 17, 10:45 PM
    Agreed, headline is not any reflection of the article content.


    However, it is entirely possible to have S&S ISAs and pay no tax on any earnings from them on amounts substantially above £100k. Unlike cash ISAs they are still worthwhile and can use the same investments inside or outside the tax wrapper.
    Also means you can still use your £500/£1000 interest allowance for the cash emergency funds in current accounts and regular savers.
    Originally posted by jimjames
    The amount of time ISAs have been around I suspect there are many people with substantially more than £100k in S&Ss ISAs, we probably have that much in lovely tax free capital gains. I hope there are not too many people with that much in cash ISAs which is the only type of ISA mentioned in the article.
    • Ray Singh-Blue
    • By Ray Singh-Blue 14th Mar 17, 6:40 AM
    • 336 Posts
    • 434 Thanks
    Ray Singh-Blue
    • #9
    • 14th Mar 17, 6:40 AM
    • #9
    • 14th Mar 17, 6:40 AM
    The amount of time ISAs have been around I suspect there are many people with substantially more than £100k in S&Ss ISAs, we probably have that much in lovely tax free capital gains. I hope there are not too many people with that much in cash ISAs which is the only type of ISA mentioned in the article.
    Originally posted by Keep pedalling
    Today they may have substantially more than £100k in an S&S ISA. But tomorrow or next month or next year they may not. Such is the nature of risky investments.

    As you point out, stock markets have been very kind over the last few years. This might make some people twitchy. They may want to bank their gains. Funds can be transferred between S&S and cash ISAs, and back again if necessary, so I can imagine why some people might currently choose to have that much in cash ISAs.
    • Pincher
    • By Pincher 15th Mar 17, 11:24 AM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    Having £100k in an ISA is cheating.

    Until Phillip Hammond spoilt the party, the £5,000 dividend allowance made it simple. HSBC pays about 6% in dividend, so £100k yields about £6,000. You can always buy a fund that spreads the risk, and pays about 5%.
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