# tax free interest

Posts: 2
Newbie
My wife age 77, has a state pension of £5309  plus £360 private, totalling £5669. Her tax code allowance is £11475 having donated some to myself. How much interest can she receive from her savings before she has to pay tax.   What I need is a simple explanation of tax free interest allowance for this case.

• Posts: 9,271
Forumite
At least all the way up to her tax limit of £11475 but I believe someone mentioned there is an extra limit for interest above that.  Might just be the £1k that anyone gets.  So at least £12475 - 5669 =   £6806 interest possibly.
"Never retract, never explain, never apologise; get things done and let them howl.”
• Posts: 12,754
Forumite
edited 24 January at 4:12PM
My wife age 77, has a state pension of £5309  plus £360 private, totalling £5669. Her tax code allowance is £11475 having donated some to myself. How much interest can she receive from her savings before she has to pay tax.   What I need is a simple explanation of tax free interest allowance for this case.
You don't pay tax on tax free interest (from cash ISA's).  Assuming you mean taxable interest then she can have £11,641 before any tax would be payable on it.

£5,641 covered by her spare Personal Allowance
£5,000 taxed at 0% (savings starter rate)
£1,000 taxed at 0% (savings nil rate)
The above is based on her reduced Personal Allowance. It might be more if you can explain how the £11,475 is arrived at.
• Posts: 2
Newbie
On checking I see that she transferred £1260 of her personal allowance to me, so the £11,475 should be £11,310 and yes, I do mean taxable interest. I was confused by Martin Lewis saying that you would pay no tax below £18,000. I believe that is true if ones earned income is about the same as  your personal allowance.
• Posts: 29,855
Forumite
What I need is a simple explanation of tax free interest allowance for this case.
https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me#toc-what-tax-rates-apply-to-my-savings-income-

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