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Saving Tax rate 10%

nottingham13
Posts: 128 Forumite


in Cutting tax
I have heard now there is a 10% tax rate on savings for people with low earners.
So, with the personal allowance starting at £5435, so between £5435 and £7755, saving income is taxed at 10%. As long as your non saving income is belows £5435.
Say if I earnt £6000 through worked income, would any saving income on top of this now be taxed at 20%?
Thanks
So, with the personal allowance starting at £5435, so between £5435 and £7755, saving income is taxed at 10%. As long as your non saving income is belows £5435.
Say if I earnt £6000 through worked income, would any saving income on top of this now be taxed at 20%?
Thanks
0
Comments
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in your example, you would be taxed at 10% on the first 1755 of interest (i.e. 7755 - 6000) and on 20% on the rest... you would have to claim this for the HMRC of course.
The actual allowances are, of course changing in september0 -
in your example, you would be taxed at 10% on the first 1755 of interest (i.e. 7755 - 6000) and on 20% on the rest... you would have to claim this for the HMRC of course.
The actual allowances are, of course changing in september
So the allowances for 2008/9 is 6,035pounds is it just in place for these years or following years also0 -
5435 is replaced by 6035 as the tax free allowance.. the 2320 at 10% for interest doesn't change... these will however apply for the whole of this tax year.
the new rates will stay until the chancellor changes them; almost certainly they will change for the new tax year i.e. from 6th april 20090 -
5435 is replaced by 6005 as the tax free allowance.. the 2320 at 10% for interest doesn't change... these will however apply for the whole of this tax year.
the new rates will stay until the chancellor changes them; almost certainly they will change for the new tax year i.e. from 6th april 2009
Thanks is the 2320 at 10% a new thing, ive never heard of that before. Lets say you earn more than 2320 in interest, the way i read the inland website is you lose the the 10% on the first 2320 and pay 20% across the board0 -
just to clarify
6035 is the tax free allownace for 2008-9
2320 at 10% only applies to interest whereas previously the allowance applied to all income (i.e. both earnings and interest and was 2230 for 2007-8)0 -
just to clarify
6035 is the tax free allownace for 2008-9
2320 at 10% only applies to interest whereas previously the allowance applied to all income (i.e. both earnings and interest and was 2230 for 2007-8)
But my reading of http://www.hmrc.gov.uk/rates/it.htm bottom of page. If your interest is more than 2320 then the 10% does not apply and it gets taxed @ 20%0 -
It say on the website
There will be a new 10% starting rate for savings income only, with a limit of £2320. If an individual’s taxable non-savings income is above this limit then the 10% savings rate will not be applicable.
I think this makes it clear. So, your savings income up to the £2320 allowance will be taxed at 10% (provided you have no other income(for easy sake)), but any interest passed this £2320 your savings will be taxed at 20%.0 -
as I read it, it says that if the individual's NON-SAVING INCOME is above 2320 then the 10% is not applicable...0
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But my reading of http://www.hmrc.gov.uk/rates/it.htm bottom of page. If your interest is more than 2320 then the 10% does not apply and it gets taxed @ 20%
Sorry ... your reading is incorrect. If any of your savings interest (the top slice of your income) hits the band formed by your (personal allowances + £2320) ...... then the interest is not taxable up to the limit of your PA and is taxable at 10% from PA to PA + £2320.
And that applies whether your PA is the basic £5435 or the higher rate of £9180. The information Clapton has posted earlier is quite correct.If you want to test the depth of the water .........don't use both feet !0 -
nottingham13 wrote: »(provided you have no other income(for easy sake).
If your only income is interest - then all your interest up to the limit of your Personal Allowance ..... is tax free. And then charged at 10% for interest falling in the zone (Personal Allowance + £2320).
Where your non-savings income exceeds your Personal Allowance + £2320 .... then the 10% band does not exist, for you.If you want to test the depth of the water .........don't use both feet !0
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