Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • moneysavingmarko
    • By moneysavingmarko 17th Mar 17, 12:59 PM
    • 2Posts
    • 0Thanks
    moneysavingmarko
    Using full savings allowance
    • #1
    • 17th Mar 17, 12:59 PM
    Using full savings allowance 17th Mar 17 at 12:59 PM
    Hi all,

    I am a higher earner and my wife is a lower earner.

    Her non-savings taxable income this year is 8072 so falls within the person allowance.
    She is therefore eligible for 5k starting rate for savings and 1k personal savings allowance.

    Her savings income is around 17k (from 12% P2P lending in her name)

    If she pays the net amount of 8072 into her SIPP does that mean she has no tax to pay on her savings income. Personal allowance 11k + 5k starting rate + 1k PSA?
Page 1
    • Dazed and confused
    • By Dazed and confused 17th Mar 17, 6:30 PM
    • 1,264 Posts
    • 504 Thanks
    Dazed and confused
    • #2
    • 17th Mar 17, 6:30 PM
    • #2
    • 17th Mar 17, 6:30 PM
    No.

    On those income figures the sipp will have no impact on her income tax liability.

    The sipp will attract basic rate tax relief at source, bumping up the amount in her sipp fund, but doesn't alter the fact that she has 8072 taxable non savings income.

    In rounds sums I would estimate her tax liability to be 1600 (assuming your reference to "this year" means this current tax year)

    25000 total income less PA 11000 = 14000 to pay tax on.

    5000 x 0% (savings rate band)
    1000 x 0% (PSA rate band)
    8000 x 20%
    • moneysavingmarko
    • By moneysavingmarko 17th Mar 17, 7:29 PM
    • 2 Posts
    • 0 Thanks
    moneysavingmarko
    • #3
    • 17th Mar 17, 7:29 PM
    • #3
    • 17th Mar 17, 7:29 PM
    thanks dazed, makes sense
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,464Posts Today

7,032Users online

Martin's Twitter
  • The strange thing with a 4yr old is having to play & smile while inside feeling sick for those in trauma in my birth town #Manchester

  • Just a quick ta-ta for now. I'm taking the week off for family time with mini and Mrs MSE. So I won't be here much. Back after the bank hol

  • Ugh another one trying it! Beware https://t.co/Ab9fCRA76F

  • Follow Martin