Stand-out Q – zero savings rate

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TUE, 06 FEB 2018

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question:

Can a client, aged 60, take advantage of the zero percent starting rate in 2018/19 if their earned income exceeds £16,850?

Answer:

No. If the client had earnings of £16,850 and savings of £2,000, their earnings would be equivalent to the personal allowance of £11,850 and the starting savings rate limit of £5,000. Their earnings exceeding the personal allowance would be taxed at 20%. The first £1,000 of savings income would be covered by the personal savings allowance with the remaining savings income falling within the basic rate band

blog table updated FEB 2018

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