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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am retired with a private pension income of £4,000 pa. and

Customer Question

I am retired with a private pension income of £4,000 pa. and no other income. My wife has basic state pension plus a teachers pension (£6,000pa). I qualify for the state pension Sept 2015. We have approx. £20,000 currently in a joint names building society account. From the meagre interest payments tax is deducted. If we move this to account in my sole name would we receive interest "gross"?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

Can you tell me your date of birth and roughly how much you expect to receive in state pension please.
Customer: replied 3 years ago.

My DoB is 7 Sept 1950; I will receive basic state pension only.

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.
Your personal allowance for 2014/15 will be £10,000. It will probably increase for 2015/16. The basic state pension is due to increase in April 2014 to £113.10 per week or £5,881 per annum. It will increase again in April 2015.

If your total income is around £7,000 for 2015/16 (you will get about half a year's state pension) then you can receive another £3,000 or so in income without paying tax so you should pay no tax on your bank interest if you put the savings in your name only depending on the interest rate you are on. Complete a form R85 to have the interest paid gross.

In 2016/17, your income will be around £10,000 for the year so you will be using most of your personal allowance against your pensions. You may need to review the position again in the light of the rate of interest at that time.

I hope this helps but let me know if you have any further questions.
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Customer: replied 3 years ago.

That clarifies the position for me.


 


Many thanks.


 


Smile

Expert:  TonyTax replied 3 years ago.
Thanks.

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