TAX ON YOUR SAVINGS - Magenta Accounts

From 2015/16 the starting rate for savings income is reduced to 0% and the savings rate band is increased to £5,000.

This means that where a person’s taxable non-savings income is not more than £5,000, it will be possible to receive a significant amount of savings income tax-free (and to reclaim any tax suffered at source).

The personal allowance for 2015/16 is to increase to £10,500.

This means that a person can receive savings income of up to £15,500 in 2015/16 before paying any tax on that income. This is in addition to any tax-free savings income derived from NISAs, etc.

To ensure that the opportunity to benefit from tax-free savings income is not wasted, it is beneficial to plan ahead. Couples should review their affairs to ensure that best possible use is made of the savings rate.