Tax free savings income
26 Jul, 2017
The Personal Savings Allowance (PSA) was launched on 6 April 2016. The allowance means that the first £1,000 interest on savings income for basic rate taxpayers is tax-free. For higher-rate taxpayers the PSA is £500. Anyone earning over £150,000 does not
benefit from the new PSA.
In addition, any taxpayers whose total taxable income is less than £17,500 won’t pay tax on any savings income. This is made up of 3 elements, the personal allowance for 2017-18 of £11,500, the £5,000 savings starting rate and the £1,000 PSA.