new tax law

polymaff

oldfella wrote: »

slight rework then, if your earned income is £11K you can enjoy £6K tax free of savings income, is that OK ?

Yes, if you use a word like "can" as a get-out for those cases where the client will not enjoy £6k taxed at 0% - not tax free, but, ultimately:

No. Like your original statement, this one is only true, even with the amendment I've highlighted, under certain circumstances.

xylophone

See https://forums.moneysavingexpert.com/discussion/comment/70470142#Comment_70470142

post 7.

polymaff

teddysmum wrote: »

oldfella's statement is true for the OP who states that she and her husband have less than £11000 income, which is not from savings,but not true for someone having income (pension and earnings) over £11000,as tax has to be paid on the excess non-savings income over £11000.

False logic, Teddysmum. If you want to make a case that the particular statement was meant to relate to the OP's circumstances, then what is its relevance when addressing income that appears to be nowhere near £16,000 - let alone £17,000? The statement was wrong.

Remember the curate's egg.

oldfella

No. Like your original statement, this one is only true, even with the amendment I've highlighted, under certain circumstances.

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you are going to have to enlighten me polymaff, under what circumstances will someone with earnings or pensions less than £11,000, not have £6000 of savings not taxed at 0% ?

distinguishing between tax free and taxed at 0% isnt helping anyone

polymaff

oldfella wrote: »

you are going to have to enlighten me polymaff, under what circumstances will someone with earnings or pensions less than £11,000, not have £6000 of savings not taxed at 0% ?

A widespread practice amongst directors of small companies - so widespread that many of the changes to the income tax regime in 2016/17 are targetted directly at this group and this practice - is to pay themselves a minimal salary - typically under £11,000 - and then to pay themselves up to the higher rate threshold via dividends. They will not have the "£6000 of savings not taxed at 0%"

oldfella wrote: »

distinguishing between tax free and taxed at 0% isnt helping anyone

So you think. Reconsider.

oldfella

so I take it we are agreed that anyone with £11000 of savings or pensions and no dividends, has £6000 savings at 0%

polymaff

oldfella wrote: »

so I take it we are agreed that anyone with £11000 of savings or pensions and no dividends, has £6000 savings at 0%

As you slowly shift from broad, but wrong, statements to more restricted scenarios, you are getting closer to a robust statement, oldfella, but the above isn't there yet.

In almost every case where the assessment is of any combination of taxable savings income and gross pension totalling £11k and no dividend income, neither the SRA nor the SPA will be invoked.

LXdaddy

oldfella wrote: »

so I take it we are agreed that anyone with £11000 of savings or pensions and no dividends, has £6000 savings at 0%

So you are saying
savings income plus pensions = £11,000
and dividend income = £0
means they have £6,000 of savings income taxed at 0%


I added the (probably implied) income to clarify.


What if they also have £32,001 of earned income?

teddysmum

polymaff wrote: »

False logic, Teddysmum. If you want to make a case that the particular statement was meant to relate to the OP's circumstances, then what is its relevance when addressing income that appears to be nowhere near £16,000 - let alone £17,000? The statement was wrong.

Remember the curate's egg.

Sorry, but being a mathematician, my logic is correct, as I defined the circumstances.


Of course someone could have an income of £16000 and earn under £11000. They would be an admittedly rare,but lucky, person who has a low income from work/pensions, but has a huge amount of savings, perhaps from the sale of property.

teddysmum

oldfella wrote: »

so I take it we are agreed that anyone with £11000 of savings or pensions and no dividends, has £6000 savings at 0%

I'm not going to comment any more, as this is getting off topic, but do you mean £11000 or less consisting of savings, earned income or pensions, means a further possible £6000 of tax free interest ?


Examples, calling pensions earned income (for brevity) :


£11000 earned : a further possible £6000 of tax free savings interest


£7000 earned and £4000 savings :a further possible £6000 of tax free interest (ie £10000 in all)


£12000 earned : a possible £5000 of tax free interest


£14000 earned : a possible £3000 of tax free savings interest