2016 no tax on first £1000 interest earned

colsten

The examples in this document should help clear up some of the questions.

masonic

melbury wrote: »

Does it mean for example that when M&S pay their shareholders a dividend, there will not be any tax deducted from next April?

So if you hold a relatively small number of shares in various companies, all of the dividends will be completely free of tax up to £5K?

Individuals who are basic rate (or non) taxpayers currently do not pay any income tax on dividends, but companies who pay dividends pay corporation tax on their profits. Corporation tax will continue to be paid, so it is only those with large amounts of dividend income and those with a high income that will see a change.

melbury

masonic wrote: »

Individuals who are basic rate (or non) taxpayers currently do not pay any income tax on dividends, but companies who pay dividends pay corporation tax on their profits. Corporation tax will continue to be paid, so it is only those with large amounts of dividend income and those with a high income that will see a change.

So the bit on a dividend voucher that says "tax credit" isn't a deduction, so I won't get that as an extra amount from April 2016?

masonic

melbury wrote: »

So the bit on a dividend voucher that says "tax credit" isn't a deduction, so I won't get that as an extra amount from April 2016?

No, it is a credit arising from the corporation tax already paid, not a deduction, but it is being abolished under the new regime.

6022tivo

This is great news.

Basically, it has boosted my income next year and beyond by £200. This will pay for most of my annual electricity useage.

This government is really working to help the workers and savers.

beefturnmail

sheramber wrote: »

Other income goes on page 3 of the self assessment return- box 16 onwards.

calculate income for child benefit

https://www.gov.uk/child-benefit-tax-charge

Thanks, so am I right in thinking that any savings interest up to £500 will be removed when calculating whether you eligible for the child benefit tax charge (since it is non-taxable income)?

john1950

Like many people I have used the Cash ISA allowance to build up my savings over quite a few years. The interest I receive will exceed the new £1,000 allowance. So will I now have the inconvenience of an annual tax return and have to pay tax on some of the interest from the ISA's.
I thought that ISA's were meant to be tax free.

Archi_Bald

ISAs are, and remain, tax-free. The £1,000 savings allowance applies to non-ISAs, and BR tax payers.

john1950

Brilliant. That is good to hear. So tax free saving allowance will actually be anything in an ISA plus £1000. (for basic rate taxpayer). Quite happy with that.

Frogletina

At the moment I am saving money because the isa interest rates are so low it is better to pay the tax on some of my savings accounts.

I could put more money into Isas next year but my thinking is that if interest rates are still not changing then it should still be the case that even if I go over the £1000 interest, it would not be worth moving my money out of my higher interest accounts.

frogletina