Starting rate for savings

eaynegirdlestone

My wife earns £11000 per year. If she transfers her personal allowance to me would she still be eligible for the starting rate for savings (0%) on interest earned on her savings which would be approx £5000?
Thanks
Wayne

Dazed_and_C0nfused

eaynegirdlestone said:

My wife earns £11000 per year. If she transfers her personal allowance to me would she still be eligible for the starting rate for savings (0%) on interest earned on her savings which would be approx £5000?
Thanks
Wayne

She can only transfer £1,260, leaving her with a Personal Allowance of £11,310.

If her taxable non savings non dividend income is £11,000 she can earn £6,310 in interest before having to pay tax on it.

£310 unused Personal Allowance then
£5,000 savings starter rate (0%) then

£1,000 savings nil rate (0%)

eaynegirdlestone

Thanks that was what I had hoped

inkydolphin

Dazed_and_C0nfused said:

eaynegirdlestone said:

My wife earns £11000 per year. If she transfers her personal allowance to me would she still be eligible for the starting rate for savings (0%) on interest earned on her savings which would be approx £5000?
Thanks
Wayne

She can only transfer £1,260, leaving her with a Personal Allowance of £11,310.

If her taxable non savings non dividend income is £11,000 she can earn £6,310 in interest before having to pay tax on it.

£310 unused Personal Allowance then
£5,000 savings starter rate (0%) then

£1,000 savings nil rate (0%)

Out of interest, how much could she earn in interest before having to pay tax on it if her other earnings were nil?

AmityNeon

inkydolphin said:

Dazed_and_C0nfused said:

eaynegirdlestone said:

My wife earns £11000 per year. If she transfers her personal allowance to me would she still be eligible for the starting rate for savings (0%) on interest earned on her savings which would be approx £5000?
Thanks
Wayne

She can only transfer £1,260, leaving her with a Personal Allowance of £11,310.

If her taxable non savings non dividend income is £11,000 she can earn £6,310 in interest before having to pay tax on it.

£310 unused Personal Allowance then
£5,000 savings starter rate (0%) then
£1,000 savings nil rate (0%)

Out of interest, how much could she earn in interest before having to pay tax on it if her other earnings were nil?

£11,310 + £5,000 + £1,000 = £17,310
+£1,260 if there is no Marriage Allowance

inkydolphin

AmityNeon said:

inkydolphin said:

Dazed_and_C0nfused said:

eaynegirdlestone said:

My wife earns £11000 per year. If she transfers her personal allowance to me would she still be eligible for the starting rate for savings (0%) on interest earned on her savings which would be approx £5000?
Thanks
Wayne

She can only transfer £1,260, leaving her with a Personal Allowance of £11,310.

If her taxable non savings non dividend income is £11,000 she can earn £6,310 in interest before having to pay tax on it.

£310 unused Personal Allowance then
£5,000 savings starter rate (0%) then
£1,000 savings nil rate (0%)

Out of interest, how much could she earn in interest before having to pay tax on it if her other earnings were nil?

£11,310 + £5,000 + £1,000 = £17,310
+£1,260 if there is no Marriage Allowance

Thanks. There are some sites out there that imply the maximum savings interest you can earn before paying tax is £5,000 regardless of how low your income is, so good that you're confirming what Martin says about it all!

eskbanker

inkydolphin said:
There are some sites out there that imply the maximum savings interest you can earn before paying tax is £5,000 regardless of how low your income is

Best stick to more reliable sources of information then!

https://www.gov.uk/apply-tax-free-interest-on-savings (definitive)
https://www.moneysavingexpert.com/savings/tax-free-savings/ (less authoritative but still useful)

kerrick

Do you have to file a self assessment tax return if your only income is made up of tax free allowances?

E.g You receive £12570 in rental income after allowable deductions, £6000 in interest from savings and £1000 in dividends, £12300 capital gains crystalised. No tax due, so do you file a SA?

If instead of rental income you used your £12570 PA for dividend or savings income so £19570 in dividends and/or interest, plus £12300 capital gains, again no tax due so would a SA return be required now?

Dazed_and_C0nfused

kerrick said:

Do you have to file a self assessment tax return if your only income is made up of tax free allowances?

E.g You receive £12570 in rental income after allowable deductions, £6000 in interest from savings and £1000 in dividends, £12300 capital gains crystalised. No tax due, so do you file a SA?

If instead of rental income you used your £12570 PA for dividend or savings income so £19570 in dividends and/or interest, plus £12300 capital gains, again no tax due so would a SA return be required now?

He's, in the circumstances you describe a Self Assessment return would be required.

eskbanker

kerrick said:

Do you have to file a self assessment tax return if your only income is made up of tax free allowances?

E.g You receive £12570 in rental income after allowable deductions, £6000 in interest from savings and £1000 in dividends, £12300 capital gains crystalised. No tax due, so do you file a SA?

If instead of rental income you used your £12570 PA for dividend or savings income so £19570 in dividends and/or interest, plus £12300 capital gains, again no tax due so would a SA return be required now?

HMRC provides a tool to establish if you need to self-assess, so you can play with all the scenarios at:

https://www.gov.uk/check-if-you-need-tax-return

jaxxx

AmityNeon said:

inkydolphin said:

Dazed_and_C0nfused said:

eaynegirdlestone said:

My wife earns £11000 per year. If she transfers her personal allowance to me would she still be eligible for the starting rate for savings (0%) on interest earned on her savings which would be approx £5000?
Thanks
Wayne

She can only transfer £1,260, leaving her with a Personal Allowance of £11,310.

If her taxable non savings non dividend income is £11,000 she can earn £6,310 in interest before having to pay tax on it.

£310 unused Personal Allowance then
£5,000 savings starter rate (0%) then
£1,000 savings nil rate (0%)

Out of interest, how much could she earn in interest before having to pay tax on it if her other earnings were nil?

£11,310 + £5,000 + £1,000 = £17,310
+£1,260 if there is no Marriage Allowance

I've read Helen Saxon's MSE article and a lot on the forums on MSE and HMRC and still feel a tad confused about this, mainly because when I rang the tax office they advised me that the £1000 PSA was included in the £5000 starting rate for savings not additional to.  Please could you give your opinion on my situation which is my only earnings are £10770 basic state pension - can I assume I can earn £7980 in savings interest that I won't have to pay tax on? (£12750 PA - £10770 earnings = £1980 unused PA + £5000 starting rate + £1000 PSA)