Dave

Thanks for the reply Admin 21 but I'm still confused. From the HMRC Help page on Tax on Savings it says: Your allowances for earning interest before you have to pay tax on it include: your Personal Allowance starting rate for savings Personal Savings Allowance Therefore, in my case, I should be able to use the residual personal allowance against the interest. Hence surely my total allowances would be: Personal Allowance + Starting Rate + Personal Savings Allowance = £18570.

Having retired & not taking any pension, my income is now from property & savings interest only. I do not get any pesion yet. My property income does not use up all of my personal allowance. However, the 23-24 online tax form seems to ignore my property mortgage interest costs. Here's an example of what I had understood the calculation would be: Rent Received: £12000 Property Expenses: £1000 Property Profit: £112000 - £1000 = £11000 Mortgage Interest: £1500 Income not including savings interest: £9500 Residual Personal Allowance: £12570 - £9500 = £3070. Savings Interest: £10000 Savings above personal tax allowance: £10000 - £3070 = £6930 Savings interest tax free allowances £1000 + £5000 = £6000. Personal Savings Allowance + Starting Rate. Taxable Savings = £6930 - 6000 = £930 Total Tax Due = £186 This is not what the tax return says. It says I'd owe £486 which is exactly waht I get from the calculation above if I did not include the mortgage interest in Box 43.