Tax on Savings Interest.

Jthoover

Should the Government consider removing or increasing the amount of interest which can be earned in savings before it attracts tax? 

At this time the maximum which can be earned is £1000pa for basic rate tax payers and £500pa for higher rate payers. Such a move would help mortgage borrowers whose interest rates have increased with no tax relief whilst any  savings interest is restricted because of taxation. Consequently the suggestion that savings interest could be used to offset the increase in mortgage interest isn’t really a viable option; this could be a temporary measure to help during this difficult period.

Dazed_and_C0nfused

The maximum for a basic rate payer is actually £5,999.  Plenty of people can use some of the the savings starter as well as the savings nil rate (aka PSA).

And it's a pipe dream for most people to be able to fill a Cash ISA with £20k each year.

Grizebeck

Dazed_and_C0nfused said:

The maximum for a basic rate payer is actually £5,999.  Plenty of people can use some of the the savings starter as well as the savings nil rate (aka PSA).

And it's a pipe dream for most people to be able to fill a Cash ISA with £20k each year.

What if you have a large amount of savings but dont actually earn anything (PAYE) , does this effect the amount of any tax paid on Savings income

Albermarle

Grizebeck said:

Dazed_and_C0nfused said:

The maximum for a basic rate payer is actually £5,999.  Plenty of people can use some of the the savings starter as well as the savings nil rate (aka PSA).

And it's a pipe dream for most people to be able to fill a Cash ISA with £20k each year.

What if you have a large amount of savings but dont actually earn anything (PAYE) , does this effect the amount of any tax paid on Savings income

With no other taxable income you can earn up to £18750 per tax year in interest tax free
.Tax-free savings: check if you're eligible - Money Saving Expert

The ability to earn interest tax free is unusual in many countries. In the UK we have quite a generous system.

Doctor_Who

Albermarle said:

Grizebeck said:

Dazed_and_C0nfused said:

The maximum for a basic rate payer is actually £5,999.  Plenty of people can use some of the the savings starter as well as the savings nil rate (aka PSA).

And it's a pipe dream for most people to be able to fill a Cash ISA with £20k each year.

What if you have a large amount of savings but dont actually earn anything (PAYE) , does this effect the amount of any tax paid on Savings income

With no other taxable income you can earn up to £18750 per tax year in interest tax free
.Tax-free savings: check if you're eligible - Money Saving Expert

The ability to earn interest tax free is unusual in many countries. In the UK we have quite a generous system.

I think that's a typo - £18,570

YBR

My spouse and Ihave savings built up over many years, and none of it historically put into ISAs as there was no need.

The akwardness for me now is that one of us is a higher rate tax payer and therefore has reduced allowance. I'm now having to move those lump savings into ISA for one (at least) of us as interest rates rise. I deal with the finances and would like to keep as much as possible in joint accounts. I would like to designate savings to the lower rate tax payer, but joint savings are imutably 50/50. 

I'd like either to designate joint accounts to be one or other for tax purposes.
Not going to happen, I think.

Sg28

YBR said:

My spouse and Ihave savings built up over many years, and none of it historically put into ISAs as there was no need.

The akwardness for me now is that one of us is a higher rate tax payer and therefore has reduced allowance. I'm now having to move those lump savings into ISA for one (at least) of us as interest rates rise. I deal with the finances and would like to keep as much as possible in joint accounts. I would like to designate savings to the lower rate tax payer, but joint savings are imutably 50/50. 

I'd like either to designate joint accounts to be one or other for tax purposes.
Not going to happen, I think.

You can split joint savings interest differently. I dont know the details, It might be worth having a google to check.