The £1000 tax free personal savings allowance.
Posted: April 3rd, 2022, 6:52 pm
Maxing out allowances
I have a question regarding the annual (up to) £1000 tax free personal savings allowance.
At the moment I feel I am doing ok for a 20% tax payer, I have maxed out my ISA for the last few years and I also have such an amount in my trading account that it gives me just under £2000 annually in dividend income as well as holding a few growth stocks.
When it comes to ideas to take advantage of the £1000 annual tax free personal savings allowance, I am completely lost. I have no ideas. So I was astonished when I checked the HMRC web site and read what it included:
Your allowance applies to interest from:
• bank and building society accounts
• savings and credit union accounts
• unit trusts, investment trusts and open-ended investment companies
• peer-to-peer lending
• trust funds
• payment protection insurance (PPI)
• government or company bonds
• life annuity payments
• some life insurance contracts
I thought that this allowance was only for bank account interest and Gov/company bonds.
I honestly had no idea that this included annuity payments or unit trusts/oeic/inv trusts.
Does this mean that if you earn £12570 per year and had £2000 per year in dividend payments from shares and £1000 per year from a unit trust, I would pay zero tax?
Am I reading this correctly? Total: 15,570 with no tax to pay?
P.S. I have a lodger that brings in £5000 per year tax free.
Many thanks, D.L.
I have a question regarding the annual (up to) £1000 tax free personal savings allowance.
At the moment I feel I am doing ok for a 20% tax payer, I have maxed out my ISA for the last few years and I also have such an amount in my trading account that it gives me just under £2000 annually in dividend income as well as holding a few growth stocks.
When it comes to ideas to take advantage of the £1000 annual tax free personal savings allowance, I am completely lost. I have no ideas. So I was astonished when I checked the HMRC web site and read what it included:
Your allowance applies to interest from:
• bank and building society accounts
• savings and credit union accounts
• unit trusts, investment trusts and open-ended investment companies
• peer-to-peer lending
• trust funds
• payment protection insurance (PPI)
• government or company bonds
• life annuity payments
• some life insurance contracts
I thought that this allowance was only for bank account interest and Gov/company bonds.
I honestly had no idea that this included annuity payments or unit trusts/oeic/inv trusts.
Does this mean that if you earn £12570 per year and had £2000 per year in dividend payments from shares and £1000 per year from a unit trust, I would pay zero tax?
Am I reading this correctly? Total: 15,570 with no tax to pay?
P.S. I have a lodger that brings in £5000 per year tax free.
Many thanks, D.L.