Personal Savings Allowance

ro1892
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in Cutting tax
According to https://www.moneysavingexpert.com/savings/personal-savings-allowance/ the personal savings allowance in the higher tax band (i.e up to £150k) is £500 a year, whereas in the additional rate band it is £0. I seem to remember reading something last year that suggested if earning over £100k (but less than £150k) the allowance decreases from £500 for every £10k extra you earn. Something like £110k - the allowance is £400, £120k - the allowance is £300 etc
I can't find this now so am beginning to think I've made it up or dreamt it. Can anyone confirm is that is correct?
I can't find this now so am beginning to think I've made it up or dreamt it. Can anyone confirm is that is correct?
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Comments
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There is some very good information on the link below.
- Basic-rate (20%) taxpayers: can earn £1,000 in savings interest per year with no tax
- Higher-rate (40%) taxpayers: can earn £500 in savings interest per year with no tax
- Additional-rate (45%) taxpayers: £0 – they do not get an allowance.
https://www.moneysavingexpert.com/savings/personal-savings-allowance/#:~:text=Your personal savings allowance (PSA,paying tax on that interest.
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ro1892 said:According to https://www.moneysavingexpert.com/savings/personal-savings-allowance/ the personal savings allowance in the higher tax band (i.e up to £150k) is £500 a year, whereas in the additional rate band it is £0. I seem to remember reading something last year that suggested if earning over £100k (but less than £150k) the allowance decreases from £500 for every £10k extra you earn. Something like £110k - the allowance is £400, £120k - the allowance is £300 etc
I can't find this now so am beginning to think I've made it up or dreamt it. Can anyone confirm is that is correct?
It's the Personal Allowance which is reduced (when adjusted net income exceeds £100k)0 -
Worth noting too that if other income is less than £17, 570 the tax free amount available for interest will be greater than £1000 due to the £5000 starting rate band on savings.
https://www.gov.uk/apply-tax-free-interest-on-savings
Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
I know people have probably asked lots of times before, but can I ask a question: If I'm transferring funds from a NS&I account to my current account, would I pay tax on the lump sum? (Its about 12k, I'm of working age and I'm on the basic tax rate. What I want to do is eventually move it a higher interest rate savings account.0
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No, you pay tax (if need be) on interest not capital.1
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hacksawcats said:I know people have probably asked lots of times before, but can I ask a question: If I'm transferring funds from a NS&I account to my current account, would I pay tax on the lump sum? (Its about 12k, I'm of working age and I'm on the basic tax rate. What I want to do is eventually move it a higher interest rate savings account.1
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Thanks for the reply. mmm, forgot to mention that at the moment it's in a non tax state, because the NS&I account is/was in my mothers name who was at retirement age and therefore did not pay tax. My mum has recently passed away and I'm in the process of applying to have the funds transferred to another account. So I was just trying to check that the money would not now become taxable? (Sorry if I'm being thick, so be gentle with me! :-))0
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hacksawcats said:Thanks for the reply. mmm, forgot to mention that at the moment it's in a non tax state, because the NS&I account is/was in my mothers name who was at retirement age and therefore did not pay tax. My mum has recently passed away and I'm in the process of applying to have the funds transferred to another account. So I was just trying to check that the money would not now become taxable? (Sorry if I'm being thick, so be gentle with me! :-))ADIOS - ES HORA DE IR 🙋♂️
(Ha sido divertido)0 -
HMRC advised me to use their online P800 tax checker, which I did, for ye 5 April 2022. To my dismay I found it calculated my tax at £159.90 more than I had paid (P60). When I examined detail of printed copy I made of its Summary (makeup) I found it had £0.00 as the 0% Starting Rate for Savings (SRS) when this should have allowed £5,000. Also, where accounting for my income from savings interest, no allowance was made for the PSA - Personal Savings Allowance - of £1,000.
This is the official HMRC self-check tax website!
I was recently notified by HMRC that my previous 3 years have been underpaid, after submitting R40s for each year, claiming tax refunds for deductions on interest from a CIC Company Bond which has to deduct tax by law for CICs.
I am awaiting their calculations to be sent me, but from other MSE posts on this topic I note how they have been contradicted BY HMRC stating there is no £5,000 SRS allowance at 0% on top of the Personal Allowance. My Self-Check on their web site seems to confirm this!
This whole matter (£5,000 SRS) should be given more prominence, as many taxpayers aren't even aware of it, and could possibly get more from their savings than they are, now interest rates are rising.
Not only is SRS stated on HM Govt website, but on many reputable organisations (Which, MSE, and more), but it seems to be a very misunderstood subject, including by HMRC themselves!0 -
The starting rate for savings is only available where your taxable earnings/pension income hasn't used the first £5,000 of your basic rate band.
For example someone earning (wages, pension, self employment etc) £20k will not get the benefit of any of the savings starter rate.
And there is no allowance specifically for interest. There is a second 0% rate band which allows upto £1,000 of savings interest to be taxed at 0%. Confusingly this is commonly referred to as the Personal Savings Allowance.0
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