The Top Easy Access Savings Discussion Area

colsten

BodMor, this forum distinguishes between savings and investments. There is nothing much about investments on the main site - it is generally about savings only.

Dividend allowance relates to investments, not savings. This thread is about instant access savings.

polymaff

colsten wrote: »

BodMor, this forum distinguishes between savings and investments. There is nothing much about investments on the main site - it is generally about savings only.

Dividend allowance relates to investments, not savings. This thread is about instant access savings.

From the 6th April, tax paid on savings income will be a function of dividend income - so I don't think that BodMor has actually committed a capital offence.

colsten

polymaff wrote: »

From the 6th April, tax paid on savings income will be a function of dividend income - so I don't think that BodMor has actually committed a capital offence.

Please provide a link to a government website that confirms that "tax paid on savings income will be a function of dividend income", what exactly the (your) words mean, and how this 'function' works.

polymaff

colsten wrote: »

Please provide a link to a government website that confirms that "tax paid on savings income will be a function of dividend income", what exactly the (your) words mean, and how this 'function' works.

https://www.gov.uk/guidance/adjusted-net-income

"From 6 April 2016 the amount of any Personal Savings Allowance you’re entitled to will be based on your adjusted net income."

.....
"Step 1 - work out your ‘net income’

Add up your taxable income.
Include things like:

• income from employment (including any company benefits)
• profits from self-employment
• taxable social security benefits
• pensions (including the State Pension)
• savings, dividend and rental income"

OK?

colsten

polymaff wrote: »

OK?

No.

The list you copied in simply describes what counts as taxable income.

There is nothing that you can produce from any official source that would confirm that "tax paid on savings income will be a function of dividend income".

polymaff

colsten wrote: »

No.

The list you copied in simply describes what counts as taxable income.

There is nothing that you can produce from any official source that would confirm that "tax paid on savings income will be a function of dividend income".

If you cannot read and comprehend the information on the page referred to, there's little more that I can do.

Eco_Miser

polymaff wrote: »

If you cannot read and comprehend the information on the page referred to, there's little more that I can do.

Well, you could explain the actual function of dividend income that tax on savings income is, and how it wasn't before.

I presume you mean that someone with £40,000 earned income, £1,000 savings income and £2000 dividend income pays no tax on the savings income but if the dividend income is £2001, there is 20% tax to pay on £500 of savings income (£100), and still no tax on the dividend income?

That's not explained on the page you linked to.

colsten

polymaff wrote: »

If you cannot read and comprehend the information on the page referred to, there's little more that I can do.

I just repeat again: There is nothing that you can produce from any official source that would confirm that "tax paid on savings income will be a function of dividend income".

colsten

Eco_Miser wrote: »

I presume you mean that someone with £40,000 earned income, £1,000 savings income and £2000 dividend income pays no tax on the savings income but if the dividend income is £2001, there is 20% tax to pay on £500 of savings income (£100), and still no tax on the dividend income?

May be this is what polymaff is trying to allude to. However, taxable income can be affected by several factors, not just dividends. For example, my Benefits In Kind (company car etc) can make me a higher rate tax payer, and that's been the case for decades. I have never heard anyone say "tax paid on savings income will be a function of Benefits In Kind".

Eco_Miser

colsten wrote: »

May be this is what polymaff is trying to allude to. However, taxable income can be affected by several factors, not just dividends. For example, my Benefits In Kind (company car etc) can make me a higher rate tax payer, and that's been the case for decades. I have never heard anyone say "tax paid on savings income will be a function of Benefits In Kind".

As I understand it, Benefits In Kind are earned income, and affect tax on savings income in exactly the same way as other earned income, and could push part of your savings income into the 40% tax band, without being taxed at 40% itself.
Previously, dividend income was assessed after savings income, and there was no way dividend income could change the tax on savings income. Now it can.