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SIPP TFLS savings and dividends effect on income tax band
BPL
Posts: 192 Forumite
As a basic rate tax payer i realise I have tax free savings interest of £1000 and £2000 dividends. When i do my SA the income tax bands are affected by this tax free income as all income is taken into account to calculate my income tax band. Is this the same for a SIPP TFLS? Is there a what's included what's not list for income taken into account when determining tax rate bands? I've obviously tried mr Google but to no avail so any help gratefully received.
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Comments
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Other than your Personal Allowance there is tax free amount for interest or dividends.
Upto £6,000 in interest and £2,000 in dividends can be taxed at 0%.
TFLS is not taxable income.0 -
TFLS is what it says on the tin - Tax free. No need to mention it in any tax return. In fact would cause a lot of confusion if you did !1
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Thankyou for your answer Dazed. I realise that ofcourse but does it affect my tax band as the savings interest and dividends do even though they are also tax free up to the allowances?0
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When i do my SA the income tax bands are affected by this tax free income as all income is taken into account to calculate my income tax band. Is this the same for a SIPP TFLS?Tax free cash doesn't go through payroll systems as its tax free. It doesn't exist as far as income tax is concerned. It doesn't get declared. Only the 75% goes through payroll and is subject to income tax bands/PA.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
Thankyou so i guess it's just the savings and dividends which are an anomaly.Albermarle said:TFLS is what it says on the tin - Tax free. No need to mention it in any tax return. In fact would cause a lot of confusion if you did !
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TFLS is not taxable income.BPL said:
Thankyou so i guess it's just the savings and dividends which are an anomaly.Albermarle said:TFLS is what it says on the tin - Tax free. No need to mention it in any tax return. In fact would cause a lot of confusion if you did !
Savings and dividends are taxable income, but only charged at 0% up to a limit.
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