Where else can I save??

fidaa

ColdIron said:

fidaa said:

ColdIron said:

fidaa said:

boingy said:

2 options:

1. Put it in your pension
2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.

With savings account first £1000 is tax free right?

£500 for higher rate tax payers (it's not tax free, rather it's taxed at 0%)

But I am guessing if you did earn a £1000 it adds onto overall income?

Yes unlike pensions. Does your employer offer salary sacrifice? That could reduce it

So if I earn 98k and get £500 interest from bank saving it becomes 98.5k?

Yes

And I get taxed 40% on the £500?

You get taxed 0% on the first £500 (your Personal Savings Allowance) and 40% on any excess

Ok so say I got £600, I would lose £40 to tax?

fidaa

Sarahspangles said:

A couple can have two lots of premium bonds plus two sets of ISA, personal tax and personal savings allowances. But if you’re single, coupling up just for tax purposes is a bit extreme.

Yes but I can't give money to my other half to put into isa etc right?

ColdIron

fidaa said:

Tom_Hendo said:

fidaa said:

boingy said:

2 options:

1. Put it in your pension
2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.

With savings account first £1000 is tax free right?

But I am guessing if you did earn a £1000 it adds onto overall income?

You are nearly right. It does add to overall income, and if overall income is above the higher tax bracket income (just over £50k) then you only get £500 tax free rather than £1000 tax free (before paying the relevent tax, in this scenario 40%) 

Also if you earn less than 17.5K there are other personal limits that kick in before the £1000, just in case thats relevant. 

What you mean about 17.5k

Is it not 12.5k?

That's the Starting Rate for Savings but it's not relevant to you as your earnings are (considerably) above £17,570

ColdIron

fidaa said:

ColdIron said:

fidaa said:

ColdIron said:

fidaa said:

boingy said:

2 options:

1. Put it in your pension
2. Put it in the highest paying savings account you can find, pay the tax and be happy that you have that much money.

With savings account first £1000 is tax free right?

£500 for higher rate tax payers (it's not tax free, rather it's taxed at 0%)

But I am guessing if you did earn a £1000 it adds onto overall income?

Yes unlike pensions. Does your employer offer salary sacrifice? That could reduce it

So if I earn 98k and get £500 interest from bank saving it becomes 98.5k?

Yes

And I get taxed 40% on the £500?

You get taxed 0% on the first £500 (your Personal Savings Allowance) and 40% on any excess

Ok so say I got £600, I would lose £40 to tax?

Yes       

ColdIron

fidaa said:

Sarahspangles said:

A couple can have two lots of premium bonds plus two sets of ISA, personal tax and personal savings allowances. But if you’re single, coupling up just for tax purposes is a bit extreme.

Yes but I can't give money to my other half to put into isa etc right?

Wrong. You can gift your spouse/partner for anything, an ISA, savings accounts (to use their unused allowances) etc. There is no gift tax in the UK. It becomes their money rather than yours

fidaa

ColdIron said:

fidaa said:

Sarahspangles said:

A couple can have two lots of premium bonds plus two sets of ISA, personal tax and personal savings allowances. But if you’re single, coupling up just for tax purposes is a bit extreme.

Yes but I can't give money to my other half to put into isa etc right?

Wrong. You can gift your spouse/partner for anything, an ISA, savings accounts (to use their unused allowances) etc. There is no gift tax in the UK. It becomes their money rather than yours

Is there not a limit tho on how much you can gift

ColdIron

Not that I'm aware of. There are inheritance tax implications if you die within 7 years of the gift but live in hope and all that eh?

cwep2

fidaa said:

ColdIron said:

fidaa said:

Sarahspangles said:

A couple can have two lots of premium bonds plus two sets of ISA, personal tax and personal savings allowances. But if you’re single, coupling up just for tax purposes is a bit extreme.

Yes but I can't give money to my other half to put into isa etc right?

Wrong. You can gift your spouse/partner for anything, an ISA, savings accounts (to use their unused allowances) etc. There is no gift tax in the UK. It becomes their money rather than yours

Is there not a limit tho on how much you can gift

Between spouses there is no limit. It’s one of the advantages of marriage. Having said that it has obviously been extended to civil partnerships etc. 

There is nothing to stop say a higher rate tax paying spouse, giving 50k to their basic rate paying partner, they save it and get interest paying only 20% (after their 1k allowance). 

People who live together and might be considered ‘common law’ partners, e.g. if they jointly own a house together or have a joint account potentially can get the same exemptions (like inheritance tax or getting the estate if there is no will) but it’s complex. 

Sarahspangles

fidaa said:

Sarahspangles said:

A couple can have two lots of premium bonds plus two sets of ISA, personal tax and personal savings allowances. But if you’re single, coupling up just for tax purposes is a bit extreme.

Yes but I can't give money to my other half to put into isa etc right?

It might not be wise to. It will depend on how finances work in your relationship. Some couples are happy to treat all income and expenditure, assets and debt as joint. Other don’t, even if they’re in a long term relationship/marriage.

fidaa

My other half earns less than 12k per annum.

Can I give her some of my earnings which she can then put into her own ISA?