Tax or no tax on savings calculation

smjxm09

Wife works part time and earns £9,718. Her personal allowance is £10,473, as we claim marriage allowance.

Allowing for her personal allowance and the starting rate for savings, which is up to £5000, how much interest can she earn on savings tax free, as we don’t know if that includes her personal saving allowance, which is a potential additional £1000?

Dazed_and_C0nfused

smjxm09 said:

Wife works part time and earns £9,718. Her personal allowance is £10,473, as we claim marriage allowance.

Allowing for her personal allowance and the starting rate for savings, which is up to £5000, how much interest can she earn on savings tax free, as we don’t know if that includes her personal saving allowance, which is a potential additional £1000?

Only someone with adjusted net income of £100k+ can have a Personal Allowance of £10,473.

Do you mean her Personal Allowance is £11,310?

She can use any spare Personal Allowance.

And then she can use any available savings starter rate band (0% tax rate).

And once that is used she can use the savings nil rate band (£1,000 taxed at 0%).

molerat

I suspect her lower tax free amount will be the usual HMRC trying to confuse people by using up spare allowance with untaxed interest. So on the face of it she will have (11310 - 9718) 1592 + 5000 + 1000 = £7592 interest tax free.

smjxm09

From tax.service.gov.uk
Your tax free amount is £10,473. 

Your tax code is 1047N
Current employment £9,718

smjxm09

The above figure includes £837 in untaxed savings so yes I need the figures based on £11310

smjxm09

molerat said:

I suspect her lower tax free amount will be the usual HMRC trying to confuse people by using up spare allowance with untaxed interest. So on the face of it she will have (11310 - 9718) 1592 + 5000 + 1000 = £7592 interest tax free.

That’s what I am looking for. Many thanks