Personal Savings Allowance guide

gazza007

Why? The PSA between the two of you is £2000.
Max interest on 3 Santander 123s is £1800. Then there's your starting rate .

Sorry its £1500, Mrs has good job so I quit work after over 30 years and run the house etc.

For a start, if you're currently a non tax-payer, you can have a total income of £17k next financial year without paying tax (not more than £11k earnings/pension).

Explain please

Bottom line is that tax system in this country is a joke, why you should pay tax on the money you have saved over the years is beyond belief

masonic

gazza007 wrote: »

Bottom line is that tax system in this country is a joke, why you should pay tax on the money you have saved over the years is beyond belief

You're not paying tax on any of your savings. You're paying tax on the interest income you receive from those savings. Just like you pay tax on other income you receive.

gazza007

masonic wrote: »

You're not paying tax on any of your savings. You're paying tax on the interest income you receive from those savings. Just like you pay tax on other income you receive.

I know but I still think it is wrong but that is the way it is so we have to accept

Spidernick

gazza007 wrote: »

I know but I still think it is wrong but that is the way it is so we have to accept

I've always thought it more than a little odd that people think that you shouldn't have to pay tax on unearned income when you have to pay tax on income that you've worked hard to get!

Can you please explain your reasoning as it seems totally illogical to my mind. Are you saying that someone who lives off their interest should pay no tax, yet the person who collects their rubbish has to do so?

Eco_Miser

The starting rate of savings tax is 0% on up to £5000 of interest, on top of whatever part of your personal allowance is unused, so £15,600 tax-free income this year, £17,000 next, including the new PSA and increase in PA.

Since your Mrs. is paying 40%, you should indeed be closing the joint Santander, and putting the money in your sole name, in accounts earning up to 6%. You should have done that this year too.

gazza007

Spidernick wrote: »

I've always thought it more than a little odd that people think that you shouldn't have to pay tax on unearned income when you have to pay tax on income that you've worked hard to get!

Can you please explain your reasoning as it seems totally illogical to my mind. Are you saying that someone who lives off their interest should pay no tax, yet the person who collects their rubbish has to do so?

As an dustman I have already paid my tax on my earnings.
As a retired dustman I don't see why I should pay tax on the interest I have made from saving hard.

Spidernick

gazza007 wrote: »

As an dustman I have already paid my tax on my earnings.
As a retired dustman I don't see why I should pay tax on the interest I have made from saving hard.

As has already been pointed out, you are not paying tax again on your earnings, just the interest (i.e. extra income) on this.

Using your logic someone could inherit a load of money or win millions on the lottery, never do a day's work in their life, and yet never have to pay any tax at all on the interest they live off. At the same time, under your proposal, you would still presumably tax income you have to toil over by work (otherwise where is your tax revenue coming from?). Can't you see how illogical that is?

masonic

gazza007 wrote: »

As an dustman I have already paid my tax on my earnings.
As a retired dustman I don't see why I should pay tax on the interest I have made from saving hard.

As a retired dustman, your other income remains taxable, so why should your interest income be any different? Many pensioners are taxpayers, even taking interest aside.

smcg2212

Is there any info about what will happen to the five pound rewards from Halifax. Will they automatically become £6.25? Are they counted as interest?

LXdaddy

smcg2212 wrote: »

Is there any info about what will happen to the five pound rewards from Halifax. Will they automatically become £6.25? Are they counted as interest?

The payment will stay at £5 Halifax will continue to pay HMRC £1.25.

There is extensive discussion of this question on this forum.