Trying to work out my personal savings allowance for this tax year

Dazed_and_C0nfused

Isthisforreal99 said:

disgruntled1234 said:

Dazed_and_C0nfused said:

disgruntled1234 said:

Thank you @Dazed_and_C0nfused

No Marriage allowance involved.

So the total interest I can earn on savings for this tax year (outside of an ISA, obviously), will be £2,660.00?  If so, I'll start to move some spare cash I have into a higher earning savings account.

Many thanks once again

No, you can earn as much as you like.  But based on the info you've provided only the first £2,660 will not have a tax liability.

The next £31,700 interest would be taxed at 20% but if you received more than £50,270 taxable income in total and hadn't made any relief at source pension contributions or Gift Aid donations then that would alter things slightly.  But that would be a nice problem to have 😉

Sorry, yes, that's what I meant.  I'm trying to pay no tax on my savings for the rest of the tax year.  I realise I can earn as much as I want in interest, but will pay tax on anything over £2660.

So you are prepared to earn no interest on some of your savings rather than get 80% of any interest above the 0% rate?

Unless you are putting the remainder in an ISA then it is bonkers logic but each to their own.

Not paying tax does seem an obsession for some people, despite best net return being the financially sensible route!

Albermarle

Isthisforreal99 said:

disgruntled1234 said:

Dazed_and_C0nfused said:

disgruntled1234 said:

Thank you @Dazed_and_C0nfused

No Marriage allowance involved.

So the total interest I can earn on savings for this tax year (outside of an ISA, obviously), will be £2,660.00?  If so, I'll start to move some spare cash I have into a higher earning savings account.

Many thanks once again

No, you can earn as much as you like.  But based on the info you've provided only the first £2,660 will not have a tax liability.

The next £31,700 interest would be taxed at 20% but if you received more than £50,270 taxable income in total and hadn't made any relief at source pension contributions or Gift Aid donations then that would alter things slightly.  But that would be a nice problem to have 😉

Sorry, yes, that's what I meant.  I'm trying to pay no tax on my savings for the rest of the tax year.  I realise I can earn as much as I want in interest, but will pay tax on anything over £2660.

So you are prepared to earn no interest on some of your savings rather than get 80% of any interest above the 0% rate?

Unless you are putting the remainder in an ISA then it is bonkers logic but each to their own.

Yes, as often said on this forum, ' Don't let the tax tail wag the investment/savings dog' 

disgruntled1234

To respond to the comments about being mad, not wanting to maximise my income and pay some tax on interest, the honest answer is, is that I can't be bothered with HMRC changing my tax code each year based on the previous year's interest and then if the following year, I earn much less interest, they'll still assume I'll be earning the same and so it just becomes a pain having to constantly notify them of predicted interest income.

I would rather my tax code stay as 1257L as next year, my aim is to take exactly £12570.00 from my SIPP and I can then increase what I save (once I've filled up my ISA next tax year).   That will be my only taxable income next year.

Dazed_and_C0nfused

disgruntled1234 said:

To respond to the comments about being mad, not wanting to maximise my income and pay some tax on interest, the honest answer is, is that I can't be bothered with HMRC changing my tax code each year based on the previous year's interest and then if the following year, I earn much less interest, they'll still assume I'll be earning the same and so it just becomes a pain having to constantly notify them of predicted interest income.

I would rather my tax code stay as 1257L as next year, my aim is to take exactly £12570.00 from my SIPP and I can then increase what I save (once I've filled up my ISA next tax year).   That will be my only taxable income next year.

You do need to do what you think is best but choosing what is likely to be a lower ISA rate rate rather than have taxable interest which gets taxed at 0% is not very MSE!

And you don't usually need to update HMRC about interest, they automatically review things each year once the actual interest details are received and notify people about any tax overpaid or underpaid.