Tax on savings when no other income ?

metrobus

Hi,could someone tell me how much interest on savings per tax year someone can earn if they have zero income from any other source please.

Ive read about the £1000 personal savings allowance and also the £5000 starting savings rate,but it seems one affects the other,could someone please explain how it works?

Also how and when  is any tax due collected? 

Thank you.

chrisbur

You also have your personnel tax allowance £12750 unless any transferred.   
https://www.gov.uk/apply-tax-free-interest-on-savings

EDIT
Oops.. Should be £12570

Dazed_and_C0nfused

metrobus said:

Hi,could someone tell me how much interest on savings per tax year someone can earn if they have zero income from any other source please.

Ive read about the £1000 personal savings allowance and also the £5000 starting savings rate,but it seems one affects the other,could someone please explain how it works?

Also how and when  is any tax due collected? 

Thank you.

You can only use the two 0% tax rates once you have used your Personal Allowance.

Depending on whether your Personal Allowance is £11,310 (Marriage Allowance applicant) or £12,570 (every one else with adjusted net income of £100k or less) you need to have at least £17,310 in interest before any tax is actually payable on it.

However if you have interest of £10,000 or more you will need to complete a Self Assessment return even if no tax is payable.

Chances are you won't be able to benefit from either the savings starter rate or the savings nil rate (aka Personal Savings Allowance) simply because you have insufficient income to need them.

You have to use things in this order,

Personal Allowance

Savings starter rate band (if available)

Savings nil rate band

metrobus

So the £12,500 personal allowance can include interest from savings?

Dazed_and_C0nfused

Yes.  And it's now £12,570 😊

langlauf

Hi all,

have just come across this query which is very clear & concise. I feel (for me) that the responses are not clear & concise. My partner (female) is over 60yrs old but has no pension or income apart interest on savings. Our query is... does she qualify for the Starting Rate For Savings (interest free) of £5000. We know she will be eligible for the £1000 but it's unclear if she also qualifies for the £5000 separately, not at all or both? Please don't suggest going onto the Goverment website as that is of no use to us. thank you in advance.

Jeremy535897

Both the starting rate for savers, and the personal savings allowances, are clearly explained here:
https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me

molerat

langlauf said:

Hi all,

have just come across this query which is very clear & concise. I feel (for me) that the responses are not clear & concise. My partner (female) is over 60yrs old but has no pension or income apart interest on savings. Our query is... does she qualify for the Starting Rate For Savings (interest free) of £5000. We know she will be eligible for the £1000 but it's unclear if she also qualifies for the £5000 separately, not at all or both? Please don't suggest going onto the Goverment website as that is of no use to us. thank you in advance.

As mentioned in earlier posts if she has no income apart from savings interest she has her £12570 personal allowance - or maybe just £11310 if she has given her 10% away - to use up before even thinking of the £1k and £5K allowances. Is her interest more than her personal allowance ?

Dazed_and_C0nfused

langlauf said:

Hi all,

have just come across this query which is very clear & concise. I feel (for me) that the responses are not clear & concise. My partner (female) is over 60yrs old but has no pension or income apart interest on savings. Our query is... does she qualify for the Starting Rate For Savings (interest free) of £5000. We know she will be eligible for the £1000 but it's unclear if she also qualifies for the £5000 separately, not at all or both? Please don't suggest going onto the Goverment website as that is of no use to us. thank you in advance.

You're overthinking things.

She is no different to anyone else. 

She can only use the savings starter rate and savings nil rate (aka Personal Savings Allowance) once she has used her Personal Allowance.

And they apply in that specific order, Personal Allowance must be used first.  Once that is used any savings starter rate available must be used.  And once that is used the savings nil rate can be used.

So unless she has interest in excess of £12,570 the two 0% rates are of no use to her.

If she has interest in excess of £10,000 she must complete an annual Self Assessment return irrespective of whether any tax is owed or not.