Personal Allowance and Savings Interest

kendalmintcake

Suppose I have no income from Work

Suppose I am not a pensioner

Suppose I have interest from savings of 10K / year and that is basically my only income

By my layman thinking. There is no Income tax due on that 10K interest

A portion of that 10K would be from a personal ISA anyway

What are your thoughts folks?

Flugelhorn

thoughts about what?

there is no income tax payable up to the personal allowance whether it is earned, pension or interest

not tax on ISA interest

Albermarle

Regardless of who you are, and regardless of the amount, there is no tax on interest generated in an ISA. That is the whole idea of ISAs.

Otherwise with no other taxable income at all, you can earn up to £18750 in interest outside an ISA without paying any tax.

How the starting rate for savings works - Money Saving Expert

thriftytwosome

As far as I’m aware savings is treated separately from other income and allowances, and has its own allowances. It may catch some people out if they think because they don’t use their personal tax allowance fully that they won't have to pay any tax on interest. That's my understanding but stand to be corrected.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82059914#Comment_82059914

I am afraid you need to be corrected. Any unused personal allowance can be used fully for savings interest.

Probably a good idea to read the link I posted earlier.

DRS1

https://forums.moneysavingexpert.com/discussion/6675218/personal-allowance-and-savings-interest

You could change the £10k figure to £18570 if you wanted and still pay no tax (even if none of the interest came from an ISA).

What you would get though is a request from HMRC for you to fill in a self assessment tax return.

Maybe better to get that money in an ISA while you can.