Nationwide 'Flex Regular Online Saver'

LukH

Hi,

I will get my interest after 12 months from my Nationwide 'Flex Regular Online Saver' account and it will be May 2019.

My interest income will be counted for 2018-2019 tax year or 2019-2020 ?

What is the total tax-free interest allowance from my current and saving accounts for 2018-2019 tax year ?

Many thanks.

Kind regards,

Luk :wave:

Dazed_and_confused

As it's a standard account there is no "tax-free" amount.

You have your Personal Allowance and then there are two tax rates which might apply but are dependent on your income in the year.

Starter savings rate (upto £5,000 interest taxed at 0%)

Savings nil rate (upto £1,000 interest taxed at 0%).

Your interest will be taxable in 2019:20. How much tax you will pay on it depends on your overall tax position.

LukH

Dear Dazed and confused,

Thanks for your prompt reply. It is very helpful.

If Nationwide 'Flex Regular Online Saver' is a standard account and interest income is taxable, would the £3000 saving a year (£250 saving per month x 12 months = £3000) be taxable ? As you mentioned, it is starter savings rate (upto £5,000 interest taxed at 0%)

Besides, how about the monthly interest income from Santander '1|2|3 Current Account' ? Is it a standard account and would the interest be taxable ?

Many thanks again.

Kind regards,

Luk

Dazed_and_confused

It is the interest that is taxable, not the capital deposited.

And yes, the interest on the Santander account would be taxable interest.

Remember, in most cases, the starter savings rate is only available if you have non savings income i.e. pension income or taxable wages) less than £16,850 in the current year.

To get the full £5,000 your non savings income would normally have to be £11,850 or less.

LukH

Dear Dazed and confused,

Thanks for your reply again.

Wishing you a Happy New Year of 2019 (and saving more money).

Kind regards,

Luk

polymaff

Savings income belongs to the tax year in which the date that the interest was credited to you belongs. So May 2019 is all in tax year ending 5th April 2020.

Before you even think about allowances make sure you understand how much tax-free interest you've earned (e.g. from ISAs) - then sum all of the rest of your, therefore-taxable, savings income for that tax year.

When you've done that you can look at your total taxable income - which includes the above sum - and calculate how much tax you will actually have to pay.

Only during that calculation will allowances - and different rates of taxation (including 0%) - come into play; and understand that although it is possible to work out how much of that tax is attributable to your taxable savings income, just how much that amount is is a function of more than just your taxable savings income.

LukH

Dear polymaff,

Thanks for your reply.

It is clearer after your clarification.

Thanks a lot.

Wishing you a Happy New Year of 2019.

Kind regards,

Luk :beer: