Cash ISA Providers Stealing My Tax Free Income

YorkshireBoy

TBC15 wrote: »

For the sake of the hard of thinking (myself included) how is this made up?

I'm no tax expert, and so may be out of my depth here, but I'm guessing...

£12,500 personal allowance
£5,000 savings income
£1,000 personal savings allowance
£2,000 dividend income

I'd imagine there won't be many people who'd fall into this category, ie only savings income?

https://techzone.adviserzone.com/anon/public/personal-taxation/intro-guide-income-tax#anchor_5

Dazed_and_confused

What YorkshireBoy says really.

You can have £12,500 from anywhere, wages, rental income, pension income, business profits etc.

But have to have £6,000 in savings interest and £2,000 dividend income.

That makes full use of the Personal Allowance and all three 0% tax rates.

If you had a spouse who wouldn't be disadvantaged adversely by applying for Marriage Allowance you could add an additional £3,333 dividend income making £23,833 before any tax is actually payable

Zero_Sum

I think what you have to remember is that when they were first introduced, you could only put in £3k a year. So similar to regular savers & high paying current accounts they could offer decent rates as it was only a limited amount. As time goes on, people build up their ISA pots so the banks are less inclined to offer market leading rates

paul235

What is the difference between savings income and personal savings allowance?

YorkshireBoy wrote: »

I'm no tax expert, and so may be out of my depth here, but I'm guessing...

£12,500 personal allowance
£5,000 savings income
£1,000 personal savings allowance
£2,000 dividend income

YorkshireBoy

paul235 wrote: »

What is the difference between savings income and personal savings allowance?

Did you read the information in the link I provided?

Dazed_and_confused

What is the difference between savings income and personal savings allowance?

Savings income is interest you receive from bank or building society accounts. Or from P2P lending. Or private loans. Etc. In the context of this thread it relates to taxable interest, not that arising from a cash ISA or other tax exempt source.

Personal Savings Allowance is the common, but confusing, name for one of the tax rates currently in force. It is really the savings nil rate of tax. Where upto £1,000 of interest is taxed at 0%.

This tax rate can only be used by people who have at least £16,251 total taxable income. Or if your Personal Allowance is £12,500 then you have to have taxable income more than £17,500 to be able to use it.