Budget 2014 and 10% tax on savings income abolished

henders

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Budget 2014 and 10% tax on savings income abolished Mar 19, 2014 15:28:54 GMT

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Post by henders on Mar 19, 2014 15:28:54 GMT

Announced that £5,000 of savings income will, from 2015, be tax free (dependant upon amount of other income).

So if you earn £10,500 (this is tax free) then you will be able to earn another £5,000 from "savings" income tax free.

Maybe a naive question but is interest from P2P classed as "savings income"?

If so the good news!"

pikestaff
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Budget 2014 and 10% tax on savings income abolished Mar 19, 2014 15:57:27 GMT

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Post by pikestaff on Mar 19, 2014 15:57:27 GMT

The short answer is yes. "Savings income" is, essentially taxable interest and thus includes p2x interest. Don't forget that (as with the current 10% rate) other taxable income will eat into the availability of the 0% band. Most people in work will not benefit, but many pensioners will.

See also:
www.gov.uk/government/uploads/system/uploads/attachment_data/file/293793/TIIN_8073_8076_the_starting_rate_of_tax_for_savings.pdf
www.gov.uk/government/uploads/system/uploads/attachment_data/file/293961/8073_The_starting_rate_of_tax_on_savings_Budget_2014_Final_v1.0.pdf

Last Edit: Mar 19, 2014 16:18:10 GMT by pikestaff

henders

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Budget 2014 and 10% tax on savings income abolished Mar 19, 2014 16:35:36 GMT

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Post by henders on Mar 19, 2014 16:35:36 GMT

Thanks PS.

Useful for my wife who has pension of around £5k and PT earnings of around 4K and earns (incl P2P) around £3.5K in interest so is pretty much in optimum position (or will be when we increase the amount she saves/invests in P2P)

I have a larger pension so it will not benefit me but it all helps