From a non tax payer to ?

bowlhead99

bjbyorkshire wrote: »

Bowlhead talks about £18k several times, where does this figure come from please. £11k +£5k +£1k =£17k where does £18k come in?
Thanks

It comes from a silly maths error where I thought 11+5+1 = 18

Now updated for £17k total, apologies. You can't actually get £18k entirely tax free unless you give up some of your earned income into a pension or VCT etc or are getting some of the interest from untaxed sources like ISAs, which wasn't what I was trying to get at

bjbyorkshire

Thanks both for the clarification.

I have found this difficult to get my head round but it is all really clear now thanks to you good folks.

I won't have the full £17k at my disposal as I gave my marriage allowance to oh. If I should find at the year end that this wasn't a good move and that I would be better to keep this £1060 myself, can I rescind this decision at any point?

Sorry to hijack the op's thread

John_Ray

Thank you every one I seem to be getting there and the detailed post from bowlhead99 has helped.

I've had another though which I will have to ring up the tax man about. As the tax was taken at source by the bank my wife hasn't ever been issued with a tax code. So now it's going to be taxed by the tax man she will need a tax code, I bet that's going to be a harder job than it sounds. But I doubt that is a question for this Board.

sleepymans

For more info see this HMRC booklet:

Personal Savings Allowance/ latest information - GOV.UK

On page 1 Para 3 says this:
If your taxable income is less than £17,000
If your total taxable income is less than £17,000 you won’t pay tax on any savings income.

That sounds extremely simple to me, and surely answers the original poster's query?? Or am I missing something?

CLAPTON

John_Ray wrote: »

Thank you every one I seem to be getting there and the detailed post from bowlhead99 has helped.

I've had another though which I will have to ring up the tax man about. As the tax was taken at source by the bank my wife hasn't ever been issued with a tax code. So now it's going to be taxed by the tax man she will need a tax code, I bet that's going to be a harder job than it sounds. But I doubt that is a question for this Board.

from tomorrow ALL INTEREST with be paid GROSS to everyone (even multi billionaires)
let me say it again
from tomorrow ALL INTEREST will be paid TAX FREE
let me say it again: from tomorrow ALL interest will be paid TAX FREE

your wife will only need to a tax code if she has PAYE income (i.e. a private pension or job)


for the tax year 2015-16 you should be able to reclaim the tax paid on the savings

gadgetmind

What about Property Income Distributions? We always had to claim the tax on this back (as do my SIPP provider, and they need nagging!) so hopefully this and shares such as BBYB will start being paid gross.

bowlhead99

Property income distributions wouldn't be covered by the starting rate for savings income or by the personal savings income allowance. They are not an interest rate being paid on your savings or loans. They are your share of the business income from running a property business.

As I mentioned in my post above, when looking at what fits onto your annual allowances you have salary and pension and business income on one hand, and savings interest income on the other hand. And then maybe you have a third hand which has dividends which were paid to you out of the profits of companies in which you invested after they'd paid whatever applicable corporate taxes. PID is explicitly not interest, nor is it dividends, so doesn't fit into either allowance.

Basically the distributions of "property income" which you get from a PAIF or whatever, will go into the same bucket (for determining tax bands) as your other property empire income - for example your BTL profits from your holiday home, or your sole trader/ partnership slum landlord business.

So, no reason to get it gross, as it remains taxable and not covered by an obvious exemption for the majority.

Usual caveats- I'm not a tax lawyer and my own PIDs come inside ISAs or SIPPs so are not an issue I need to worry about.

gadgetmind

I have to nag BestInvest every year regards PID tax reclaims and do the calcs for them!

Regards the OP, call me Mr. Avarice, but I'd be focussing on the tax reclaim and trying to get "back pension" for spouse at this point. The latter could be quite tasty.

bowlhead99

Not wanting to derail the thread further, but...

You mention BYBB paying net. At a glance, isn't it just a normal equity-type investment, paying dividends, so the apparent withholding shown on a tax voucher is just the 10% notional tax credit which is nothing you can actually reclaim? BYBB isn't a REIT paying PID is it?

xylophone

They are your share of the business income from running a property business.

http://www.hmrc.gov.uk/manuals/saimmanual/saim5330.htm