Foreign saving interest calculation? Urgent help

everfor007

Whatever i earn in uk, i am transferring to india and kept in Fixed deposits and getting interest year £12000.  Recently received a hrmc letter to declare my foreign income, so i need to amend the SA for 17/18 and 18/19.  I am a Limited company director, taking my perks as below
Salary - £11800
Dividend - £27000
Foreign interest on my saving - £12000
is there any saving tax relief for 17/18 or 18/19 financial year? what will be my tax approximately? From google, i am not finding the tax calculator which is accepting saving tax interest option. Kindly advise?

cattie

Don't you have an accountant with that sort of income? Surely that's the best person to advise you.

everfor007

As of now looking for ball park figure and trying to understand any saving tax relief for that amount, Appreciate if anybody advise.

bowlhead99

Some of your interest income will be covered by allowances or a special low rate, but it will push some of your dividend income into a higher tax bracket.

If you get the standard UK personal allowance:
2017/18:
Personal allowance, £11,500.
Higher rate threshold £45,000 (so 5800 of your total 50800 income is over the threshold).
Starter Rate for savings income: 0% up to £5000 above the personal allowance.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%.

So with your figures in 2017/18:
First £11500 of salary is within personal allowance (£0 tax)

The last £300 of salary is taxed at 20% (£60 tax).
First £4700 of savings interest is at starter rate (£0 tax) to use up the next £5000 above the personal allowance.
Next £500 of savings interest is covered by PSA (£0 tax).
Next £6800 of savings interest is at 20% (£1360 tax).
First £5000 of dividend income taxed at 0% (£0 tax).
Next £16,200 of dividend income taxed at 7.5%
(£1215 tax).
Last £5800 of dividend income is above the basic rate allowance, taxed at 32.5% (£1885 tax).

2018/19, personal allowance is higher, dividend allowance is lower, other rates and allowances the same:
Personal allowance, £11,850. 
Higher rate threshold £46,350 (so 4450 of your total 50800 income is above the threshold).
Starter Rate for savings income: 0% up to £5000.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £2000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%

So with your figures in 2018/19:
£11800 of salary is within personal allowance (£0 tax)
£50 of interest income is within personal allowance (£0 tax)

First £5000 of savings interest is at starter rate (£0 tax)
Next £500 of savings interest is covered by PSA (£0 tax)
Next £6450 of savings interest is at 20% (£1290 tax)
First £2000 of dividend income taxed at 0% (£0 tax)
Next £20,550 of dividend income taxed at 7.5%
(£1541 tax)
Last £4450 of dividend income is above the basic rate allowance, taxed at 32.5% (£1446 tax)

Dazed_and_C0nfused

bowlhead99 said:

Some of your interest income will be covered by allowances or a special low rate, but it will push some of your dividend income into a higher tax bracket.

If you get the standard UK personal allowance:
2017/18:
Personal allowance, £11,500.
Higher rate threshold £45,000 (so 5800 of your total 50800 income is over the threshold).
Starter Rate for savings income: 0% up to £5000.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%.

So with your figures in 2017/18:
First £11500 of salary is within personal allowance (£0 tax)

The last £300 of salary is taxed at 20% (£60 tax).
First £5000 of savings interest is at starter rate (£0 tax)
Next £500 of savings interest is covered by PSA (£0 tax)
Next £6500 of savings interest is at 20% (£1300 tax)
First £5000 of dividend income taxed at 0% (£0 tax)
Next £16,200 of dividend income taxed at 7.5%
(£1215 tax)
Last £5800 of dividend income is above the basic rate allowance, taxed at 32.5% (£1885 tax)

2018/19, personal allowance is higher, dividend allowance is lower, other rates and allowances the same:
Personal allowance, £11,850. 
Higher rate threshold £46,350 (so 4450 of your total 50800 income is above the threshold).
Starter Rate for savings income: 0% up to £5000.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%

So with your figures in 2018/19:
£11800 of salary is within personal allowance (£0 tax)
£50 of interest income is within personal allowance (£0 tax)

First £5000 of savings interest is at starter rate (£0 tax)
Next £500 of savings interest is covered by PSA (£0 tax)
Next £6450 of savings interest is at 20% (£1290 tax)
First £2000 of dividend income taxed at 0% (£0 tax)
Next £20,550 of dividend income taxed at 7.5%
(£1541 tax)
Last £4450 of dividend income is above the basic rate allowance, taxed at 32.5% (£1446 tax)

2017:18
If £300 of the salary is being taxed at basic rate then how is all £5,000 of the savings rate band still available to be used?

bowlhead99

Dazed_and_C0nfused said:

bowlhead99 said:

Some of your interest income will be covered by allowances or a special low rate, but it will push some of your dividend income into a higher tax bracket.

If you get the standard UK personal allowance:
2017/18:
Personal allowance, £11,500.
Higher rate threshold £45,000 (so 5800 of your total 50800 income is over the threshold).
Starter Rate for savings income: 0% up to £5000.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%.

So with your figures in 2017/18:
First £11500 of salary is within personal allowance (£0 tax)

The last £300 of salary is taxed at 20% (£60 tax).
First £5000 of savings interest is at starter rate (£0 tax)
Next £500 of savings interest is covered by PSA (£0 tax)
Next £6500 of savings interest is at 20% (£1300 tax)
First £5000 of dividend income taxed at 0% (£0 tax)
Next £16,200 of dividend income taxed at 7.5%
(£1215 tax)
Last £5800 of dividend income is above the basic rate allowance, taxed at 32.5% (£1885 tax)

2018/19, personal allowance is higher, dividend allowance is lower, other rates and allowances the same:
Personal allowance, £11,850. 
Higher rate threshold £46,350 (so 4450 of your total 50800 income is above the threshold).
Starter Rate for savings income: 0% up to £5000.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%

So with your figures in 2018/19:
£11800 of salary is within personal allowance (£0 tax)
£50 of interest income is within personal allowance (£0 tax)

First £5000 of savings interest is at starter rate (£0 tax)
Next £500 of savings interest is covered by PSA (£0 tax)
Next £6450 of savings interest is at 20% (£1290 tax)
First £2000 of dividend income taxed at 0% (£0 tax)
Next £20,550 of dividend income taxed at 7.5%
(£1541 tax)
Last £4450 of dividend income is above the basic rate allowance, taxed at 32.5% (£1446 tax)

2017:18
If £300 of the salary is being taxed at basic rate then how is all £5,000 of the savings rate band still available to be used?

You're right of course - I was only half paying attention while doing it on a phone waiting for someone to join me for lunch (the companion and the lunch both being rather more interesting than the query )

Now edited to reflect the fact that only £4700 of the savings income can fit into the first £5000 above the personal allowance and take advantage of the 0% rate for interest income in that band; so £300 more of the interest gets taxed at 20% compared to what I'd originally written, increasing total tax by £60.

Thanks

dales1

But the OP only wanted ball-park figures anyway !

You're both fixated on accuracy

(and so am I) !

Aceace

bowlhead99 said:

Some of your interest income will be covered by allowances or a special low rate, but it will push some of your dividend income into a higher tax bracket.

If you get the standard UK personal allowance:
2017/18:
Personal allowance, £11,500.
Higher rate threshold £45,000 (so 5800 of your total 50800 income is over the threshold).
Starter Rate for savings income: 0% up to £5000 above the personal allowance.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%.

So with your figures in 2017/18:
First £11500 of salary is within personal allowance (£0 tax)

The last £300 of salary is taxed at 20% (£60 tax).
First £4700 of savings interest is at starter rate (£0 tax) to use up the next £5000 above the personal allowance.
Next £500 of savings interest is covered by PSA (£0 tax).
Next £6800 of savings interest is at 20% (£1360 tax).
First £5000 of dividend income taxed at 0% (£0 tax).
Next £16,200 of dividend income taxed at 7.5%
(£1215 tax).
Last £5800 of dividend income is above the basic rate allowance, taxed at 32.5% (£1885 tax).

2018/19, personal allowance is higher, dividend allowance is lower, other rates and allowances the same:
Personal allowance, £11,850. 
Higher rate threshold £46,350 (so 4450 of your total 50800 income is above the threshold).
Starter Rate for savings income: 0% up to £5000.
Personal savings allowance for someone with total income over the higher rate threshold: £500 at 0%.
Dividend allowance for first £5000 dividends to be charged at 0%.
Dividend tax rate within basic rate band: 7.5%.
Dividend tax rate within higher rate band: 32.5%

So with your figures in 2018/19:
£11800 of salary is within personal allowance (£0 tax)
£50 of interest income is within personal allowance (£0 tax)

First £5000 of savings interest is at starter rate (£0 tax)
Next £500 of savings interest is covered by PSA (£0 tax)
Next £6450 of savings interest is at 20% (£1290 tax)
First £2000 of dividend income taxed at 0% (£0 tax)
Next £20,550 of dividend income taxed at 7.5%
(£1541 tax)
Last £4450 of dividend income is above the basic rate allowance, taxed at 32.5% (£1446 tax)

Sorry to be pedantic, but highlighted line should be: 
Dividend allowance for first £2000 dividends to be charged at 0%.
Which has been correctly applied in the calculations. 

Thanks for clear analysis though.