0% tax payer query on allowances on savings.

dutchism1958

Afternoon,

I would be grateful if someone could confirm whether my understanding on allowances for a 0% tax payer are correct please?.

I gave up work in September 2012 to care for my wife.I am 58 and she is 80.
We live off my wife's state and private pension.She is a basic rate tax payer.We have no debts,no mortgage.We have savings invested in S&S ISA's and fill our allocation each year and 3 Santander 123 accounts with 20K in each and 2 TSB classic plus accounts.All of the above accounts are registered for gross interest in my name.
I have 3 final salary pensions which mature when I am 66 and my full allocation of NI contributions for the state pension.
I have the marriage allowance.
In addition,since finishing work 4 years ago I get attendance and carers allowance.
Having sifted through the HMRC website and looked here, my understanding is I have the following allowances on interest from savings before I pay any tax.

Personal Savings Allowance £1000
Personal Allowance £11000
Starting rate for savings £5000

I also understand that the Personal allowance can be back-dated 4 years.
I had a Newcastle Building Society 4 year bond which matured in April 2016.Registered for gross interest and which accrued £7700 interest over that period from the 34K starting point.

Am I right in thinking I owe no tax therefore?.

My thanks in advance.
Gary.

polymaff

dutchism1958 wrote: »

Afternoon,

I would be grateful if someone could confirm whether my understanding on allowances for a 0% tax payer are correct please?.

I gave up work in September 2012 to care for my wife.I am 58 and she is 80.
We live off my wife's state and private pension.She is a basic rate tax payer.We have no debts,no mortgage.We have savings invested in S&S ISA's and fill our allocation each year and 3 Santander 123 accounts with 20K in each and 2 TSB classic plus accounts.All of the above accounts are registered for gross interest in my name.
I have 3 final salary pensions which mature when I am 66 and my full allocation of NI contributions for the state pension.
I have the marriage allowance.
In addition,since finishing work 4 years ago I get attendance and carers allowance.
Having sifted through the HMRC website and looked here, my understanding is I have the following allowances on interest from savings before I pay any tax.

Personal Savings Allowance £1000
Personal Allowance £11000
Starting rate for savings £5000

I also understand that the Personal allowance can be back-dated 4 years.
I had a Newcastle Building Society 4 year bond which matured in April 2016.Registered for gross interest and which accrued £7700 interest over that period from the 34K starting point.

Am I right in thinking I owe no tax therefore?.

My thanks in advance.
Gary.

£1800 pa on the 123s until recently
£200 pa on the TSBs until 4/1/17
£1925 pa on the NBS
Carer's Allowance about £3300 pa ?


Even were it all in your own name, then if that is your entire taxable income you are well within your Personal Allowance for this and the previous tax years. So no tax due.

dutchism1958

Thanks for your quick reply Polymaff,it is appreciated!.
Gary.

cjc1951

You might like to be aware that HMRC have got a problem with their software (at least for the 2015/16 tax year) meaning that for those of us who have transferred out our marriage allowance, the 0% rate on investment income has not been applied (as it should be) resulting in potential overpayment of tax. Check any tax assessments that you each receive with care!

polymaff

cjc1951 wrote: »

You might like to be aware that HMRC have got a problem with their software (at least for the 2015/16 tax year) meaning that for those of us who have transferred out our marriage allowance, the 0% rate on investment income has not been applied (as it should be) resulting in potential overpayment of tax. Check any tax assessments that you each receive with care!

Could you quote the figures from the faulty assessment?

cjc1951

The difference between the tax they wanted and the refund eventually agreed is £212 which is the 20% on the £1060 value of the marriage allowance.

polymaff

I was hoping that you'd post the assessment figures, i.e. the gross taxable non-savings income, the gross taxable savings income and the nett dividend income you declared - and HMRC's initial tax assessment.

Seandrv

Im not sure how to post a new thread so wanted to jump on and ask. Im on tax code 1100 as I was only earning 5k but now on on a better salary im now on 11800 so im paying full 20% rate. Will I get a rebate or is it a straight 11k cut off?

Dazed_and_confused

If you changed from 5000 to 11800 part way through this tax year (to 5 April 2017) you probably won't earn enough to pay tax but will start paying some after 5 April.

The 1100 code will increase to 1150 from April for most people so you will be earning 300 over the new allowance which will be £60 tax a year so £5 month or just over £1 a week if weekly paid.

You don't earn 11500 then pay tax though, each time you are paid you get a portion of the 11500 with no tax and then pay tax on anything over that.

If you mean you are now paying 20% on all of your new salary then something has gone wrong with your new employer. Did you give them your P45 from your previous job, if not did you sign a new starter declaration with the new company? If you were on the emergency tax code then you would only pay tax in any week where you earned more than £211.