Tax free Allowance for income

buyhighselllow

Hi , can I just check in for some advice and clarification.

Wife did retire and returned PT a couple of years ago but is now ready to no longer return.

She has a small business which along with her small pension creates an income of £7K/ year. With her PT job she was just below the tax threshold which was reduced as I claim the married couples allowance.

So there is an opportunity to further redistribute savings for tax saving. We are also receiving a small inheritance from which I will be looking add about £100K to our savings.

So, how much can my wife now earn in interest per year before being liable for tax ( we will utilise our ISA allowances obviously).
I always get confused with the savers allowance and personal allowance for people below the tax threshold.
 We are still several years off SP age, but both fully credited. 

Albermarle

She can earn up to £18570 minus her income. So when she stops work that will be around £11,570 interest she can earn each tax year without paying any tax on it.
If she earns more than £10K in interest, she has to inform HMRC, unless she is doing self assessment anyway,

Bigwheels1111

I’m a low income earner.
£18570 - £4341.60 carers allowance = £14,228.40 of tax free interest I can earn.
Over 10k interest Self assessment is needed.
This year SA was the easiest it’s ever been.
I logged in, found do I need to file a return, answered a few questions, it said yes I need to file.
The form asked a few more questions and then, gave me 2 boxes to fill out.
Income, and untaxed interest.
Before you had to tick 30 plus boxes.
Start to finish was 10 or 20 minutes.

Dazed_and_C0nfused

buyhighselllow said:

Hi , can I just check in for some advice and clarification.

Wife did retire and returned PT a couple of years ago but is now ready to no longer return.

She has a small business which along with her small pension creates an income of £7K/ year. With her PT job she was just below the tax threshold which was reduced as I claim the married couples allowance.

So there is an opportunity to further redistribute savings for tax saving. We are also receiving a small inheritance from which I will be looking add about £100K to our savings.

So, how much can my wife now earn in interest per year before being liable for tax ( we will utilise our ISA allowances obviously).
I always get confused with the savers allowance and personal allowance for people below the tax threshold.
 We are still several years off SP age, but both fully credited. 

Her starting point is £17,310.

Add together her taxable earnings, pension and profits (not turnover).

Assuming that total is no more than £11,310 then deduct it from £17,310.  What is left is the interest she can earn before paying tax on it.

NB.  Interest that takes her total income above £11,310 will be taxed but the first £6,000 (above £11,310) is taxed at 0%.