Tax Free Interest

Money_Shy

If you have a joint savings account and one person is a 20% tax payer and the other is a 40% tax payer does that mean we can get £1,500 interest before it gets taxed?

xylophone

Each of the account holders is entitled to half the interest paid on the account and each of them is taxed at the rate appropriate to his/her circumstances on his/ her portion.

NoodleDoodleMan

https://www.gov.uk/apply-tax-free-interest-on-savings

RG2015

Money_Shy wrote: »

If you have a joint savings account and one person is a 20% tax payer and the other is a 40% tax payer does that mean we can get £1,500 interest before it gets taxed?

If you earned £1,500 then you would be liable for tax on £750 each. Assuming that this income did not change your overall tax positions then the 20% person would not pay any tax and the 40% person would pay tax on £250.

Dazed_and_confused

If you have a joint savings account and one person is a 20% tax payer and the other is a 40% tax payer does that mean we can get £1,500 interest before it gets taxed?

No, all savings interest which was previously taxable is still taxable however it is possible for a 20% taxpayer to have a maximum of £5999 interest taxed at a special rate of 0%. And a minimum of £1000.

A higher rate payer will get £500 taxed at 0%.

So the basic rate payer will pay £0 tax on the £750 and a higher rate payer will usually pay £100.