yes 1k is tax free 3k is taxed at 20% as a basic tax payer so 1/5th off 3k so 200x3= £600 unfortunatly
needs to convert savings to isa based packages the maximum each year [20k at present] year after year to maximize the tax free amount
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tax on savings taxable after 1k is it automatic or self declaration??
- Thread starter big-all
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needs to convert savings to isa based packages the maximum each year [20k at present] year after year to maximize the tax free amount
Actually, looking at the following, if his salary is £12k a year, he may not have to pay any tax on his £4K interest. A simple call to the tax office should clear it up.
Personal Allowance
You can use your Personal Allowance to earn interest tax-free if you have not used it up on your wages, pension or other income.Starting rate for savings
You may also get up to £5,000 of interest and not have to pay tax on it. This is your starting rate for savings.The more you earn from other income (for example your wages or pension), the less your starting rate for savings will be.
If your other income is £17,570 or more
You’re not eligible for the starting rate for savings if your other income is £17,570 or more.If your other income is less than £17,570
Your starting rate for savings is a maximum of £5,000. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
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That looks informative. I will let him know later.
Regarding ISA. As the financial year is ending next month, can he put £20k in an ISA now and then another £20k in the same ISA in April as that is the start of the next financial year?
Yes. Assuming he hasn’t put anything in this financial year. Depending on the ISA rules, some fixed rate ISA's only allow deposits for a certain period of time from opening them. If he wants a fixed rate one, he may have to open a variable rate one in this year (with no early closure penalties) and transfer that plus any new amount into a fixed rate one in April.
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ok in case any one is interested
by judicial planing and by having a open savings account that only pays interest on the anniversary or when you close the account so decided to aim for around 900 on fixed accounts and that left about £95 to play with from my normal use accounts
today i closed the account with £90 and with all the other accounts matured [payed out] and paying interest off £905 i have now reached the final amount off £995 in interest
i could have gone tighter but decided not worth the risk
will let you know iff it triggers any action as i i dont have any forms normally as the railway pension deals with the tax above the annual allowance
by judicial planing and by having a open savings account that only pays interest on the anniversary or when you close the account so decided to aim for around 900 on fixed accounts and that left about £95 to play with from my normal use accounts
today i closed the account with £90 and with all the other accounts matured [payed out] and paying interest off £905 i have now reached the final amount off £995 in interest
i could have gone tighter but decided not worth the risk
will let you know iff it triggers any action as i i dont have any forms normally as the railway pension deals with the tax above the annual allowance
I don't favour holding much money in cash, as its value is eroded by inflation.
But I hope you have maxed your holdings in ISAs and Premium Bonds, which are tax free.
I find the effort of maxing a detailed tax return is best avoided by staying well inside the allowances.
As I understand it, any bank etc that pays you interest will tell HMRC, so if it totals ove £1000 you'll get taxed on the excess.
Cash eroded by inflation
But you want to max out in bonds with the possibility of no growth whatsoever
yes exactly what i think was just wondering exactly how it will work in practice
i assume i will hear nothing as below the threshold or will my unrelated about £20 from 224 barclay shares and £262 from a virgin isa be included and trigger something and need no action as dismissed or some action to resolve
yes i understand that as not applicable its more for others for information so iff the unexpected can be included and cause problems i will report iff it happens but thanks for your input
Utter nonsense.
so 24 million people are guaranteed a win.
There is approx 120 billion premium bonds with 71 million prizes last year
so do not talk utter nonsense it is a lottery
