Personal Savings Allowance
On 6 April 2016, the Government introduced the Personal Savings Allowance. This allows you to earn interest on your savings and current account balance tax free, up to a certain amount.
What this means for you?
How much will your allowance be?
The table shows your allowance from 6 April 2016, depending on whether you’re a basic, higher or additional rate taxpayer.
|Tax rate||Income band (adjusted net income)||Personal Savings Allowance|
|Basic 20%||Up to £43,000||Up to £1,000 in savings income is tax-free|
|Higher 40%||£43,001 - £150,000||Up to £500 in savings income is tax-free|
|Additional 45%||Over £150,000||No Personal Savings Allowance|
If you exceed your Personal Savings Allowance you may still need to pay tax on the interest you earn. HMRC will normally collect this by changing your tax code.
The current tax rules are subject to change by HM Revenue & Customs and the value of tax benefits depends on individual circumstances.
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