Mixed Budget News

charlieboycat

masonic wrote: »

So in 2016/17 it will be possible to earn up to £22,000 without paying a penny of income tax based on what we currently know.

More with ISAs etc :T.

But yes - Except that to do so you need taxable non-savings and non-dividend income of £11,000 or less - then £11,000+ in the right mix of dividends and interest. The latter suggests significant capital (ie. interest earning savings and dividend earning investments). Do many have that sort of capital (say £350k+) but such a low earned income? Someone whose only earned income is a state pension but who's won the lottery perhaps?

masonic

charlieboycat wrote: »

But yes - Except that to do so you need taxable non-savings and non-dividend income of £11,000 or less - then £11,000+ in the right mix of dividends and interest. The latter suggests significant capital (interest earning savings and dividend earning investments). Do many have that sort of capital but such a low earned income? Someone whose only earned income is a state pension but who's won the lottery perhaps?

It's going to be a fairly rare situation, but those in pre-retirement who are maxing out their pension contributions and have a large unwrapped HYP might find themselves in this boat.

bigadaj

charlieboycat wrote: »

More with ISAs etc :T.

But yes - Except that to do so you need taxable non-savings and non-dividend income of £11,000 or less - then £11,000+ in the right mix of dividends and interest. The latter suggests significant capital (ie. interest earning savings and dividend earning investments). Do many have that sort of capital (say £350k+) but such a low earned income? Someone whose only earned income is a state pension but who's won the lottery perhaps?

State pension with inheritance might be a more common example. There's probably more people than you'd expect who are income poor but asset rich in this manner, though the majority won't be anything like sophisticated investors so the opportunity for dividends won't be recognised, maybe a job for an ifa?

redux

charlieboycat wrote: »

More with ISAs etc :T.

But yes - Except that to do so you need taxable non-savings and non-dividend income of £11,000 or less - then £11,000+ in the right mix of dividends and interest. The latter suggests significant capital (ie. interest earning savings and dividend earning investments). Do many have that sort of capital (say £350k+) but such a low earned income? Someone whose only earned income is a state pension but who's won the lottery perhaps?

Someone semi-retired from a company, receiving dividends, not yet drawing a pension, doing occasional consultancy there and paying any excess earned income over £11k into pension funds.

Same sort of person once they fully stop work and start drawing just a modest pension to start with.

gadgetmind

charlieboycat wrote: »

Do many have that sort of capital (say £350k+) but such a low earned income?

My wife does, and I suspect many spouses (take your pick of sex, no bias here!) are in this position if the other partner's earnings and tax position are asymmetrical.

TCA

Was there anything further in last week's budget about being able to withdraw funds from an ISA and re-deposit into the ISA in the same tax year? Or is it still scheduled for "autumn"? I don't recall seeing anything.