Just received state pension......and have small dividend paying investments.

Misterkevster

Hi All
....as it says....just received State Pension, and combined with an even smaller (Yes!) Teacher's Pension, this takes my total income to around £15000pa. 
I *believe* the Single Persons Tax Allowance to be £12570....and I understand that the difference is taxable.

Additionally....I have some small income producing investments...which would also attract payment of tax.
Question : Can I avoid (is that the word?) Tax by moving those investments to a non-income producing form??

I'm new to this area!!!

Thanks

NannaH

Are your investments not in an ISA?   

Misterkevster

About 25% in an ISA....remainder not so!!

NannaH

So your investment income is above the £1000 limit? 

Is it less than the £5000 allowable under the starting rate for low earners?
https://www.gov.uk/apply-tax-free-interest-on-savings

Misterkevster

A cursory look over my accounts for last year shows income to have been app. £3000

NannaH

Then you might have a little tax to pay but check that Gov link to confirm it.   Then get as much as you can into your ISA pre and post April. 

Misterkevster

OK....get it into an ISA asap!
But what about the 'income' that is being received?
Am I best to forego that income....and convert investments to 'growth' types??

molerat

Do you need the income ?   If so can you get that income from an ISA ?

You need to know exactly what your teachers and state pension income is and deduct that from £18570 to see how much, if any, would be taxable.

Marcon

Misterkevster said:

OK....get it into an ISA asap!
But what about the 'income' that is being received?
Am I best to forego that income....and convert investments to 'growth' types??

You're referring to dividend income - you can have £2,000 a year of dividends on top of your personal allowance. See https://www.gov.uk/tax-on-dividends

As mentioned above, you can have at least £1,000 of interest tax free on top of the above, possibly more - NannaH has given the link.

For the tiny amount of tax involved, aren't you worrying too much about the tax aspect, rather than considering whether or not you need the income? At some point you'll presumably take it as income, and given the way things are looking, tax rates are only going to increase.

As for ISAs - you may get much better rates elsewhere, so don't rush to move your funds there when it might not be to your benefit.

Misterkevster

molerat said:

Do you need the income ?   If so can you get that income from an ISA ?

You need to know exactly what your teachers and state pension income is and deduct that from £18570 to see how much, if any, would be taxable.

Aaaaggghhh.....£18570 (not £12570)
My total pensions and income would be less than this!!

molerat

But you also need to know exactly what that income is - dividends or interest - as it is taxed differently

https://www.litrg.org.uk/tax-guides/pensioners/what-tax-do-i-pay-savings-and-dividend-income