Would you like to have up to £5,000 of savings income,
free of tax, and also effectively increase your taxfree personal
allowance to £11,660 (rather than the normal £10,600)
in the coming tax year?
In theory both will be possible from next 6 April 2015. In
practice you may find yourself prevented from taking advantage of
these potential tax savings by the various rules that surround
them.
The opportunity to enjoy £5,000 tax-free income stems from
a change to the starting rate band, and was announced by the
Chancellor in the 2014 Budget. At present that band is £2,880
wide and savings income within it is taxed at 10%. From 2015/16 the
band will expand to £5,000 and will be taxed at a 0% rate.
However, you can only take advantage of this starting rate band if
it has not already been taken up with earnings and/or pension. So
broadly speaking, your earnings or pension should be no more than
your personal allowance. You must also have the right type of
investment
