Maximum Savings Interest before I need to pay tax

Hi,

Based on that information your grandfather would not meet the criteria for Self Assessment. You can check the Self Assessment criteria at:

Check if you need to send a Self Assessment tax return

Thank you.

Hi Johnny L,
This depends on your income - Tax on savings interest.
Thank you.

I'd rather not have another 2 hours on the phone so trying to see if I can get definitive answer to this. I have no paid employment. I claim no benefits. I have no pension. My sole income is from interest on savings & share dividends. How much may I earn in interest before I have to pay income tax? The agent I spoke to yesterday told me it was £1000. Even though I have no other income. When I questioned him as I believed that information was incorrect his reply was, 'I think that is what it is but I could be wrong.' Excellent employee you have there. Filled me full of confidence. And then when I told him that if he is wrong that would have an impact on me, he said he'd transfer me to someone else. Except he cut me off. So. Please. How much can I earn in interest in a tax year, where my income is solely interest on savings & share dividends before I have to pay income tax?

Hi,

Please refer to:

Tax on savings interest

Thank you.

I'm still not sure how much I may earn before having to pay tax - the actual figure. Would I be correct in assuming it would be personal allowance + £5000 starting rate + £1000 as basic rate tax band? I am aware that if I earn over £10000 I need to complete a self-assessment form.

My wife pays no income tax as her only income is her State Pension of £5374. This has allowed her to arrange a Marriage Allowance Transfer to me. She does have savings that currently generate over £5000. I realise she can use the Starting Savings Allowance of £5000 and Personal Savings Allowance of £1000 meaning no tax would be due. However I believe where income is below the Personal Tax Allowance of £12570 the difference between this and the income, can be added to the tax free savings allowance. This allows savings interest of more than £6000 to be untaxed. For example using my wife’s figures: Personal Allowance £12570 Less: Income (State Pension) £5374 Marriage Allowance Transfer. £1260 (minus) £6634 Leaving Personal Allowance (equals) £5936 Add: Starting Savings Allowance £5000 Personal Savings Allowance. £1000 (add) £6000 Amount of savings interest tax free £11936 Am I correct? At what stage would a tax return be required? I would welcome advice and thank you in advance. Apologies, but I was unable to complete the maths in any other way!

Hi, I will have a private pension of £14,795 after tax. Plus interest of savings approx £7,000. When calculating amount of tax to be paid on my savings interest should I be using the gross value or net value of my pension?

Hi Paulie,
Yes that is correct.
Thank you.

Hi 2005WL mearns,
Yes your wife would be entitled to the starting rate for savings and personal saving allowance.
Details online at Tax on savings interest.
A Self Assessment would be due if the untaxed savings interest was more than £10,000.
You can check if you meet Self Assessment criteria at Check if you need to send a Self Assessment tax return.
Thank you.

Hi June Johnston,
To confirm, it will be the gross value. 
Thank you. 

Hi, My wife has total wages of £11,500, UK savings interest of £2,770 and foreign savings interest of £1,400. Please may I ask whether her both UK and foreign savings interest can be benefit from the starting rate for savings allowance of £5,000? Many thanks.

Hi Johnny Li,
Yes, untaxed foreign interest and savings interest from the UK can be covered by the Starting Rate for Savings.
Thank you. 

 

Hi, I currently have a full time job with the basic tax rate of 20%, all pretty straight forward but have invested savings into fixed bonds which pay out approximately £12000 per year in interest. Will my tax code automatically be adjusted under PAYE or do I need to contact the HMRC? There are a lot of conflicting numbers on the internet of what can be earned before being taxed on savings. How much can I earn in interest on my savings before paying tax? How will this tax be payed, through my PAYE tax code or by some other means?

Hi
You need to register for Self Assessment if your income from savings and investments is over £10,000. Further information is available here:
Tax on savings interest

Hello My wife does not work but claims child benefit for one child. She earns interest from savings. Am i correct in assuming she can earn a maximum of £17,570 a year in interest payments without paying any tax? Also, if them interest payments are above £10,000 a year, she would have to fill in a self-assessment? It's all a bit confusing. I'd appreciate clarity on the above. Thanks very much

According to the checker I do not need to send a tax return (Lower Rate taxpayer, total income pension + state pension £30K, and Interest less than £10K). But I think I need to pay tax on savings interest payments, gross £4K. So I don't understand why the savings threshold used by the checker is £10K. Can you help me understand why the checker threshold is greater than the tax free allowance? Thanks.

Hi Fes2K6,
You can see guidance here:
Tax on savings interest
A Self Assessment tax return would be due if the untaxed savings interest was more than £10,000.
You can check if you meet Self Assessment criteria here:
Check if you need to send a Self Assessment tax return.
Thank you.

Hello, I have a salary of 53k which I am taxed on by PAYE. I am receiving a gift which I intend to save and generate interest on to the value of circa 10k. If it is just under 10k, how do I pay tax on the interest? It says HMRC will adjust my code, do I then pay via my payslip adjustments? I am slightly confused on if I will need to complete a self assessment if the amount is just below 10k.

Hi,
The checker rate of 10k is for the need to complete a tax return.
For interest of 4k you will still be assessed under PAYE.
Thank you.

sorry may be being a bit slow here but wanted to clarify what it says on the check if you need self assessment and also the tax on savings interest. also your response to Fes2K6 above. I am a higer rate tax payer so £500 gross interest allowance applies to me for 2023-24 I received just over that, so in theory I should be paying tax on the amount over, but self assessment not required as it is not £10k