Andrew Burnett

Is the personal savings allowance not first deducted from the savings income (just as the personal allowance is deducted from the earned income)? If it is not deducted, then when there is a capital gain, savings income below the personal savings allowance is effectively being taxed, which contradicts the statements on the HMRC website and elsewhere that savings below the personal savings allowance are tax free. This would need to be reworded to say such savings are only tax free when there is not a large capital gain.

If I have income within the basic rate band, savings interest less than the tax-free allowance of £1000 and a large property capital gain, I understand that the amount of this charged at the lower rate of capital gains tax is calculated by subtracting my taxable income from the basic rate band. Does this calculation include my savings income? I would expect not, as otherwise the savings income would not be tax-free. But I have discovered that the tax calculation in the self-assessment system does include the savings income when calculating capital gains tax, effectively taxing this savings income at 10%. Is this correct?