“Have you got to grips with the Personal Savings allowance?”
One of the most significant changes announced in the 2015 Budget, was the introduction of the Personal Savings Allowance (PSA). This came into effect in April 2016 and it is estimated 95% of savers will no longer pay tax on their savings. Previously basic rate tax payers lost £20 for every £100 earned interest and higher rate tax payers (40%) lost £40. The new PSA enables basic rate tax payers to earn £1,000, and higher rate tax payers £500 in interest without any tax being deducted. Additionally, any savings that are already tax free (such as ISAs) do not count toward this allowance.
All banks and building societies should now be paying interest gross, however savings interest goes beyond bank interest. Any clients invested in corporate bond, fixed interest and distribution funds will also be entitled to have the interest paid gross. Unfortunately, due to the complexity in changing the systems to ensure thousands of funds paid distributions gross, investors will need to reclaim this from HMRC for this tax year (2016/2017).
Are your savings and investments arranged in the most tax efficient way to ensure they are maximising all their allowances?
If you would like further help with your investment/pensions arrangements including the new pension freedoms please contact Debbie Day. 07704311021 www.debbiedayifa.co.uk