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  • FIRST POST
    • Alice Carden
    • By Alice Carden 15th Sep 18, 8:18 AM
    • 15Posts
    • 1Thanks
    Alice Carden
    Working out my Tax due
    • #1
    • 15th Sep 18, 8:18 AM
    Working out my Tax due 15th Sep 18 at 8:18 AM
    What would my tax payable be on 11,850 personal allowance?

    Salary 11,800
    Savings Interest 4,930 (outside ISA)
    Share dividends 1,940 (outside ISA)
Page 1
    • chrisbur
    • By chrisbur 15th Sep 18, 8:56 AM
    • 2,976 Posts
    • 1,612 Thanks
    chrisbur
    • #2
    • 15th Sep 18, 8:56 AM
    • #2
    • 15th Sep 18, 8:56 AM
    What would my tax payable be on 11,850 personal allowance?

    Salary 11,800
    Savings Interest 4,930 (outside ISA)
    Share dividends 1,940 (outside ISA)
    Originally posted by Alice Carden
    Looks like none to me.
    Salary is under your personal allowance, interest under your starting rate for savings interest and dividends under your tax-free dividend allowance.
    https://www.gov.uk/apply-tax-free-interest-on-savings
    https://www.which.co.uk/money/tax/income-tax/income-tax-on-savings-and-investments/dividend-tax-ax8p28u7hyqt
    • Alice Carden
    • By Alice Carden 15th Sep 18, 9:11 AM
    • 15 Posts
    • 1 Thanks
    Alice Carden
    • #3
    • 15th Sep 18, 9:11 AM
    • #3
    • 15th Sep 18, 9:11 AM
    Would that change if my employer contributes 1,200 to my pension or are contributions excluded for income?
    • 00ec25
    • By 00ec25 15th Sep 18, 9:28 AM
    • 6,976 Posts
    • 6,655 Thanks
    00ec25
    • #4
    • 15th Sep 18, 9:28 AM
    • #4
    • 15th Sep 18, 9:28 AM
    no tax to pay

    salary 11,800 - 11,850 personal allowance = zero taxable income = 0 tax to pay

    starting rate for savings: salary 11,800 + other income (0) = 11,800. This is less than your personal allowance therefore the whole of your stating rate for savings (5,000) remains intact + you have not touched your 1,000 interest free allowance
    so:
    interest rec'd 4,930 - 5,000 - 1,000 = 0 = zero taxable interest

    dividends rec'd 1,940 - dividends 0% band 2,000 = 0 = zero taxable dividends

    At 18/19 tax rates, the tax thresholds are intended to help ("favour"?) low income people who have "high" unearned income, eg: pensioners. So, you can potentially receive 19,850 before you would pay any tax at all:

    salary or pension no more than 11,850
    savings interest no more than 6,000
    dividends no more than 2,000
    Total tax free income 19,850
    Last edited by 00ec25; 15-09-2018 at 9:42 AM.
    • 00ec25
    • By 00ec25 15th Sep 18, 9:37 AM
    • 6,976 Posts
    • 6,655 Thanks
    00ec25
    • #5
    • 15th Sep 18, 9:37 AM
    • #5
    • 15th Sep 18, 9:37 AM
    Would that change if my employer contributes 1,200 to my pension or are contributions excluded for income?
    Originally posted by Alice Carden
    contributions by an employer to your pension pot are not classed as your earnings
    Last edited by 00ec25; 15-09-2018 at 9:41 AM.
    • Alice Carden
    • By Alice Carden 16th Sep 18, 8:20 AM
    • 15 Posts
    • 1 Thanks
    Alice Carden
    • #6
    • 16th Sep 18, 8:20 AM
    • #6
    • 16th Sep 18, 8:20 AM
    That's great to know and very helpful.

    So now I know its not 1k or 5k savings tax free but I could qualify for 6k
    • 00ec25
    • By 00ec25 16th Sep 18, 8:46 AM
    • 6,976 Posts
    • 6,655 Thanks
    00ec25
    • #7
    • 16th Sep 18, 8:46 AM
    • #7
    • 16th Sep 18, 8:46 AM
    So now I know its not 1k or 5k savings tax free but I could qualify for 6k
    Originally posted by Alice Carden
    yes, provided your income is less than the personal allowance so you do not lose any of the starting rate . If your income is more than the personal allowance you lose it 1 for 1

    you should post on the savings and investment board to offer advice on where to get such high interest rates .... ?
    • uknick
    • By uknick 16th Sep 18, 10:55 AM
    • 787 Posts
    • 355 Thanks
    uknick
    • #8
    • 16th Sep 18, 10:55 AM
    • #8
    • 16th Sep 18, 10:55 AM

    you should post on the savings and investment board to offer advice on where to get such high interest rates .... ?
    Originally posted by 00ec25
    Maybe she has oodles of capital invested. Cleared 500k from house sale, not hard to get 5k in interest each year.
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