PSA help please

Ocelot

EthicsGradient said:

pookey said:

I want to make sure I'm below the threhold, I'm a basic rate tax payer so I get 1k.
Are monthly savers interest calculated when they mature please? Also I have a few easy access accounts, I need to double check but I think some of them pay interest yearly so do I add them in accordance to which tax year they are paid or do I need to add them manually please?

Interest falls in the tax year in which it has been declared and you can access it (even if you pay a penalty for doing so).

So if you're saving monthly into an account and it only adds the interest onto the account when it matures, then it's the maturity date that counts. But if you apply to close it early, then it's the closure date.

If an easy access account pays interest yearly (either by paying out to a current account, or by adding to the easy access balance), then it's the yearly date that counts.

As far as "adding manually" - do you mean that you already do self-assessment for income tax? 

In theory, but I always have to pay tax every year on all my non-ISA accounts, whether I can access them or not.

pookey

Dazed_and_C0nfused said:

pookey said:

Dazed_and_C0nfused said:

Basic rate layers can have a maximum of £5,999 in interest taxed at 0%.

Have you factored in the savings starter rate?  Might not be applicable but if your non savings non dividend income is less than £5,000 more than your Personal Allowance then you will usually have some available.

The interest will almost always be taxable in the tax year that it's credited to your account.

Isn't that if you earn less then £12,570?

No, that would be unused Personal Allowance (assuming you hadn't applied for Marriage Allowance).

For example if you have taxable earnings of £16,000, your only other taxable income was interest and hadn't applied for Marriage Allowance then you would be paying basic rate tax on £3,430 of your earnings.

That will leave you with £1,570 of the savings starter rate band (0% tax rate) to use before you can use the £1,000 savings nil rate band (aka Personal Savings Allowance).

Thank you. 
I'm not working at the moment but get £19,200 per year for rent. So did that mean I get the £1,000 PSA please? 

pookey

EthicsGradient said:

pookey said:

I want to make sure I'm below the threhold, I'm a basic rate tax payer so I get 1k.
Are monthly savers interest calculated when they mature please? Also I have a few easy access accounts, I need to double check but I think some of them pay interest yearly so do I add them in accordance to which tax year they are paid or do I need to add them manually please?

Interest falls in the tax year in which it has been declared and you can access it (even if you pay a penalty for doing so).

So if you're saving monthly into an account and it only adds the interest onto the account when it matures, then it's the maturity date that counts. But if you apply to close it early, then it's the closure date.

If an easy access account pays interest yearly (either by paying out to a current account, or by adding to the easy access balance), then it's the yearly date that counts.

As far as "adding manually" - do you mean that you already do self-assessment for income tax? 

Thank you for explaining. Yes I complete a self assessment for a property I rent out. I'm not working at the moment so that's my only income

Dazed_and_C0nfused

pookey said:

Dazed_and_C0nfused said:

pookey said:

Dazed_and_C0nfused said:

Basic rate layers can have a maximum of £5,999 in interest taxed at 0%.

Have you factored in the savings starter rate?  Might not be applicable but if your non savings non dividend income is less than £5,000 more than your Personal Allowance then you will usually have some available.

The interest will almost always be taxable in the tax year that it's credited to your account.

Isn't that if you earn less then £12,570?

No, that would be unused Personal Allowance (assuming you hadn't applied for Marriage Allowance).

For example if you have taxable earnings of £16,000, your only other taxable income was interest and hadn't applied for Marriage Allowance then you would be paying basic rate tax on £3,430 of your earnings.

That will leave you with £1,570 of the savings starter rate band (0% tax rate) to use before you can use the £1,000 savings nil rate band (aka Personal Savings Allowance).

Thank you. 
I'm not working at the moment but get £19,200 per year for rent. So did that mean I get the £1,000 PSA please? 

Assuming that the profit from the rental income is at least £18,570 and your interest doesn't take you into higher rate tax then yes, the first £1,000 of interest will be taxed at 0%.