Will I be taxed?

angelinamay

Bigwheels1111 said:

angelinamay said:

Exodi said:

angelinamay said:

Mark_d said:

No you don't get taxed on money you already have.  You only get taxed on money you receive eg. dividends, interest, wages, capital gains.

Thank you Mark - I was considering withdrawing the lot and hiding  it under the matress...

But to be clear (and as he said), any interest generated would be taxable, unless it was held in an ISA or is within the starting/personal savings allowances.

If you were receiving an annual taxable income above £17,570 (but below £50,270), the first £1,000 in savings interest would not be taxable, but any interest above this would be.

As an example, £41k in a non-ISA savings account earning 4.5% is generating £1845 in interest per year, meaning £845 would be liable to tax.

Pretty easy to remedy by using your annual ISA allowance (£20k) - you could even use an easy access Cash ISA.

(You may have already considered all the above, in which case, disregard).

My annual income in total is less than £12k - reduced state pension (contribution deficient) 

That is easy to work out.

The first £18,570 is tax free.

£12,570 is tax free, this can be made up of Earnings, Pensions or interest.

£  5,000 Starter savings rate. ( Interest )

£  1,000 Personal saving rate..

So £18,570 - £12,000 pension leaves £6570 of tax free interest before you would pay tax on it.

I have no reason not to believe what you've stated, but this is an excellent explanation!!   Many thanks,