Taxpayers can now earn £500-£1,000 in savings income tax-free.
From 6 April 2016, basic rate taxpayers can earn up to £1,000 in savings income tax-free. Higher rate taxpayers can earn up to £500. These are the Personal Savings Allowance.
Savings income includes account interest from:
- bank and building society accounts
- accounts with providers such as credit unions or National Savings and Investments
- interest distributions (but not dividend distributions) from authorised unit trusts, open-ended investment companies and investment trusts
- income from government or company bonds
- most types of purchased life annuity payments.
You can see examples at ACCA’s UK technical advice and support pages
HMRC has published a guide to the Personal Savings Allowance
Article from ACCA In Practice