Jump to content
House Price Crash Forum
Sign in to follow this  
Panda

Savings Tax Has Been Abolished

Recommended Posts

The 10% tax rate that applies to a band of savings for people whose other income is below their personal allowance will be cut to 0% and the band widened to £5000 from April 2015. The result will be that people with an income below £15,500 (£15,660 if born before April 6, 1938) will pay no tax on the interest on their savings. They will have to tell their bank or building society.

Missed that in the budget, that will get the silver surfers on board along with the pension giveaway...

Edited by Panda

Share this post


Link to post
Share on other sites

The 10% tax rate that applies to a band of savings for people whose other income is below their personal allowance will be cut to 0% and the band widened to £5000 from April 2015. The result will be that people with an income below £15,500 (£15,660 if born before April 6, 1938) will pay no tax on the interest on their savings. They will have to tell their bank or building society.

Missed that in the budget, that will get the silver surfers on board along with the pension giveaway...

Will also pull in a lot of middle earning pensioners. An income of say £18,000 and savings income of £5,000 would mean half was taxed and half wasn't. It sounds a simple tax change until you consider people where savings income is either side of the £15,500 threshold. There again allowing for a 10% band was even more complicated.

Share this post


Link to post
Share on other sites

Anyone can take advantage if they want. All income above PA into pension, and unless you have a stratospheric amount of cash on balance/savings, all interest will be free of tax.

Share this post


Link to post
Share on other sites

The 10% tax rate that applies to a band of savings for people whose other income is below their personal allowance will be cut to 0% and the band widened to £5000 from April 2015. The result will be that people with an income below £15,500 (£15,660 if born before April 6, 1938) will pay no tax on the interest on their savings. They will have to tell their bank or building society.

Missed that in the budget, that will get the silver surfers on board along with the pension giveaway...

I don't know how to take advantage of this. My wife is not earning, and we stuffed money in a 123 account in her name. If we tell the bank she is not earning.... then she forfeits the account.

So unless proper savings accounts pay half decent interest, this is of no use to me, and I suspect many others.

Share this post


Link to post
Share on other sites

I don't know how to take advantage of this. My wife is not earning, and we stuffed money in a 123 account in her name. If we tell the bank she is not earning.... then she forfeits the account.

So unless proper savings accounts pay half decent interest, this is of no use to me, and I suspect many others.

Could your wife not just fill in an R85 Form to receive her interest without deduction of tax? It doesn't mean she's not earning, just that she has a low income.

We have two Santander 123 accounts to take advantage of the 3% savings - My wife's account was opened as a 'bill - paying' account ( One of the options of the application form ) rather than a salary funded account as her salary is paid into the Halfax £5 reward account. She was accepted without any problems so not having a salary paid in may not be a problem.

As a last resort, she could fill in a Self - Assessment tax return form after the end of the year - My experience is that HMRC are very prompt with refunds. Usually within a couple of weeks of submitting the online return

Edit: Spelling

Edited by M21er

Share this post


Link to post
Share on other sites

that will get the silver surfers on board along with the pension giveaway...

Also handy if you have a non-working spouse. Just put all savings in their name and collect the interest tax-free.

Share this post


Link to post
Share on other sites

this applies to ANYONE not just pensioners

read this for an explanation

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf

of course this is not a lot of help to savers until they up IRs on savings accounts

As per my earlier point, it becomes complicated where savings income straddles the £15,500 threshold.

It is still largely aimed at an older demographic who are likely to have a lower non savings income and a higher savings income. Most working tax payers will be disqualified by the £15,500 threshold.

Share this post


Link to post
Share on other sites

http://www.nationwide.co.uk/products/savings/our-savings-accounts/all-savings-accounts

Living on interest alone from cash savings; even if you had half a million in the Nationwide locked up for five years, so your only income, you would be of tax free savings tax status now, well April next year....

Just shows how low the yield is on cash, so how low the yield is on earnings, which mirrors cash for the working poor....and the savings poor...If cash and earnings return such a poor return, assets matched, well leveraged against these two pretty important input variables, are so so out of sync? Good night....

Share this post


Link to post
Share on other sites

As per my earlier point, it becomes complicated where savings income straddles the £15,500 threshold.

It is still largely aimed at an older demographic who are likely to have a lower non savings income and a higher savings income. Most working tax payers will be disqualified by the £15,500 threshold.

but I thought the 'Older demographic' were all well off baby boomers. :o

Share this post


Link to post
Share on other sites

but I thought the 'Older demographic' were all well off baby boomers. :o

Nope asset rich, income poor. You can be worth a million these days (assuming most is in a house) and pay no income tax. Offered the million pounds or a wage of £25,000 pa and no assets...... a bit of a no brainer really.

Edited by crashmonitor

Share this post


Link to post
Share on other sites

Nope asset rich, income poor. You can be worth a million these days (assuming most is in a house) and pay no income tax. Offered the million pounds or a wage of £25,000 pa and no assets...... a bit of a no brainer really.

Sell the house, pay off the debts, drawdown on half a million at 27k per annum indexed linked including annual interest returned at sh!tty low current rates, will last you at least twenty years. Anyone fifty or older must be mad not to consider this option.......No point being wealthy and dead, better being poor and approaching dead...

Share this post


Link to post
Share on other sites

If banks and building societies embrace this like they did with ISAs all they will do is pocket the tax difference themselves and reduce the interest rate on deposit accordingly..

Share this post


Link to post
Share on other sites

Nope asset rich, income poor. You can be worth a million these days (assuming most is in a house) and pay no income tax. Offered the million pounds or a wage of £25,000 pa and no assets...... a bit of a no brainer really.

but where would you live and how many 'older generation' have houses worth a million (outside the London bubble of course) and this 'so-called' perk is only available to those with an income of less than 15K - hardly rich. :angry:

Share this post


Link to post
Share on other sites

If banks and building societies embrace this like they did with ISAs all they will do is pocket the tax difference themselves and reduce the interest rate on deposit accordingly..

The base rate in Oz is 2.5%, you can easily get 4% plus on your savings..just ninety days notice, no long term tie in's....

The UK the base rate is 0.5%, its a tad difficult getting 2% return...

Savings rates will not go any lower in the UK, hence the tax giveaway as there is no tax to take really...

Its not really a giveaway, most of it would be reclaimed through the personal allowance anyway...

The biggy is the annuity, not really the tax free return on income derived only from savings interest only up to 15.5k or 2600.00 pounds sterling in allowance...

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   203 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.