SAIM1112 | Savings and investment income: tax on savings and investment income: starting rate for savings

Where an individual’s non-savings income is less than the starting rate for savings limit, the savings income will be taxable at the 0% starting rate for savings up to the limit. From 6 April 2015 the limit is the individual’s personal allowance plus the starting rate band of £5,000.

Where an individual’s non-savings income exceeds the starting rate for savings limit, the starting rate for savings is not available.

Bank and building society interest is paid to individuals gross – without deduction of basic rate income tax.

Individuals can claim a repayment if some of their savings income is taxable at the starting rate for savings but tax has been deducted.