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Does bank interest gets added to your income which dictates your tax bracket and PA?

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  • Spir4
    Spir4 Posts: 84 Forumite
    Sixth Anniversary 10 Posts
    Spir4 said:
    Spir4 said:
    I was referring to taxable interest indeed, but I didn't think of ISA interest, so you make an interesting point.

    So say in Scenario 1, if that interest was from an ISA, your total income would be seen as £100,000 and your PA wouldn't get reduced? You get the £500 without any implications at all?
    You've lost me there 😕

    If you have income from employment of £100,000 what use is the £500 savings nil rate band 🤔

    Scenario 1:
    Your income from employment is £100,000
    So your income from employment is £100,000, that's your total income. You've got £500 interest from an ISA, which  doesn't get added to your employment income to get to your total income. You're total income is still £100,000. If that £500 was interest from a normal savings account, then it would get added.

    Thanks Bookworm105 for confirming!
    If your only taxable income is £100,000 then you aren't into tapered Personal Allowance territory in the first place.  

    If your adjusted net income is £100,500 then you will lose £250 of your Personal Allowance.
    Yes, but my question was about what gets added to your adjusted net income. Interest from a savings account does, interest form an ISA doesn't! So that's all cleared up, thanks everyone for your help!
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