£15000 ISA allowance

dbro1

Hi,

I have been reading up on ISA's and am thinking of setting one up. Just wondered if I get the £15000 tax free allowance how that would affect interest from other non ISA savings? Would this then be taxed or is the limit only applicable to ISA's and can I continue to get non taxed interest on standard savings accounts? I know I have repeated myself here, just trying to make the question as clear as possible. Note: I am unlikely to earn more than my 2015/16 HMRC personal allowance.

Many thanks

ceredigion

dbro1 wrote: »

Hi,

I have been reading up on ISA's and am thinking of setting one up. Just wondered if I get the £15000 tax free allowance how that would affect interest from other non ISA savings? Would this then be taxed or is the limit only applicable to ISA's and can I continue to get non taxed interest on standard savings accounts? I know I have repeated myself here, just trying to make the question as clear as possible. Note: I am unlikely to earn more than my 2015/16 HMRC personal allowance.

Many thanks

Santander 1-2-3 with an R85 then. No ISA needed

xylophone

Interest on an Isa is always tax free - it has no effect on interest received on other accounts.

Presumably you have registered R85 on your non-isa savings accounts if you do not pay tax.

See also https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf

Interest rates on ISAs and ordinary savings accounts are not very good at the moment - you might be better off using high interest current accounts.

How much do you have to save?

DesG

It is not a 15K tax free allowance.

It is a 15K annual limit on contributions to your ISA(s).

dbro1

xylophone wrote: »

How much do you have to save?

£20k............

dbro1

ceredigion wrote: »

Santander 1-2-3 with an R85 then. No ISA needed

Bit confused as you have to pay in £500 p/m.... So in a year I will only have 6k..... Unless as I have 20k I would open the a/c with 14k and pay in the 500 p/m?

enthusiasticsaver

The monthly contribution into the Santander 123 account has to be a minimum of £500 but you can put anything above that into it and it does not have to stay in there. I have £20k in one of mine and my salary goes in every month then I transfer it back out again the same day. You can do that with a transfer from another account you have.

Eco_Miser

dbro1 wrote: »

Bit confused as you have to pay in £500 p/m.... So in a year I will only have 6k..... Unless as I have 20k I would open the a/c with 14k and pay in the 500 p/m?

It's a current account, so you can pay in as much or as little as you want - except that to get the interest you have to show that you're actually using it as a current account, by paying at least £500 over the course of the month, and paying some of it out again via direct debit.

Many people with £20k ensure that £500 goes in and £500 plus the interest goes out.

Vortigern

dbro1 wrote: »

Bit confused as you have to pay in £500 p/m.... So in a year I will only have 6k..... Unless as I have 20k I would open the a/c with 14k and pay in the 500 p/m?

Even if you have no income you can put your £20000 in the 123 account, then each month you transfer £500 out then back in again. Don't forget you also need 2 direct debits.

bigfreddiel

DesG wrote: »

It is not a 15K tax free allowance.

It is a 15K annual limit on contributions to your ISA(s).

This tax year 15/16 you can earn £5000 in interest as long as your other earnings for example pension, work dividends tec are less than your personal tax allowance whic is £10,600. This means you can earn £15,600 tax free this year.

It may be a bit confusing because it's so similar to the isa allowance

Cheers fj

bigfreddiel

Vortigern wrote: »

Even if you have no income you can put your £20000 in the 123 account, then each month you transfer £500 out then back in again. Don't forget you also need 2 direct debits.

Make sure you transfer it out to a non-Santander account because internal transfers do not count.

Cheers fj