Tax on savings income and ISA’s
Post Author:
Anne Melville
Date Posted:
February 27, 2019
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The Savings Allowance means a certain amount of savings income, such as bank and building society interest, can be earned tax-free. In 2018/19, this is up to £1,000 for basic rate taxpayers, up to £500 for those paying higher rate tax and nil for additional rate taxpayers.
Transferring just £1,000 of savings income from a higher rate (40%) tax-paying spouse or civil partner, who has used their Savings Allowance in full, to a basic rate spouse or civil partner with no other savings income may save up to £400 of tax a year.
ISA’s are a popular investment. Savings held within an ISA are free of income tax and capital gains tax. Investments must be made by 5 April 2019 to take advantage of the limit for 2018/19. The maximum you can save is £20,000 in 2018/19. It remains at this figure for 2019/20.
As ISA investment limits cannot be carried into future tax years, you should check that you and your family have made full use of the limits available for the current tax year where possible.
