Personal Savings Allowance guide

taxman1234

Also....if I put £20k into an ISA would that interest not be counted as having to declare on SA return?

Dazed_and_C0nfused

taxman1234 said:

Also....if I put £20k into an ISA would that interest not be counted as having to declare on SA return?

No, interest from an ISA is exempt from tax so it's not relevant to your income tax liability.

taxman1234

Dazed_and_C0nfused said:

taxman1234 said:

Also....if I put £20k into an ISA would that interest not be counted as having to declare on SA return?

No, interest from an ISA is exempt from tax so it's not relevant to your income tax liability.

What about the NS & I guaranteed income bond?
Please tell me that's the same lol ?

Dazed_and_C0nfused

taxman1234 said:

Dazed_and_C0nfused said:

taxman1234 said:

Also....if I put £20k into an ISA would that interest not be counted as having to declare on SA return?

No, interest from an ISA is exempt from tax so it's not relevant to your income tax liability.

What about the NS & I guaranteed income bond?
Please tell me that's the same lol ?

Nope, that's taxable.

taxman1234

Dazed_and_C0nfused said:

taxman1234 said:

Dazed_and_C0nfused said:

taxman1234 said:

Also....if I put £20k into an ISA would that interest not be counted as having to declare on SA return?

No, interest from an ISA is exempt from tax so it's not relevant to your income tax liability.

What about the NS & I guaranteed income bond?
Please tell me that's the same lol ?

Nope, that's taxable.

Grrrr....damned government!! Lol
Don't think I'll be over the £10k interest but will check and perhaps open an ISA.

Great forum ...thanks.

jimexbox

Zopa have a cash isa @ 5.08% AER. Which you can add/withdraw whenever you like. It may be beneficial to use to keep you below the tax threshold. 

taxman1234

jimexbox said:

Zopa have a cash isa @ 5.08% AER. Which you can add/withdraw whenever you like. It may be beneficial to use to keep you below the tax threshold. 

Yep...thanks....saw that one...also looked at the Chartered Savings Fixed Rate ISA too @ 5.53% monthly income paid into my nominated account.

I know overall it's only £100 per year more...so it's instant access vs fixed.

taxman1234

Thanks for all the previous advice.....used up my £20k ISA allowance to keep me out of SA return completion territory. 

pecunianonolet

Asking for a good friend here:

He was on a ca 45k salary with bonus option of 5%. He also paid a certain percentage into a workplace pension and contributions were taken from net salary. In that case PSA of £1000 would apply as he is even with full bonus and £1000 interest still below the £50,270 limit. His tax code is slightly above the £12,570 tax free allowance.

Now, he got a raise to 50k salary and bonus option of 8% applicable from end of November salary. He has told me he has not reached the £1000 interest yet but is over £500 already and is worried now having to pay 40% tax on any interest above the £500. His plan was to wait until the £1000 PSA is reached and move funds into an ISA, no contributions made this year yet.

He asked me if I would know if his pension contributions to his workplace pension (he claims tax back at end of tax year) would reduce his taxable income and keep him under the £50,270 limit and how to calculate that.

The questions is not if pension payments reduce taxable income, which is clear they do but how on earth he could now calculate if he will be over or under £50,270, especially as the change happens in the middle of the tax year.

Basically if he has still time to wait or needs to start filling up the ISA now?

ColdIron

pecunianonolet said:

The questions is not if pension payments reduce taxable income, which is clear they do

Pension contributions from net salary do not reduce taxable income in the same way that Salary Sacrifice does. However they do raise the higher rate threshold from £50,270 thereby increasing the amount taxed at 20% and reducing that taxed at 40%