Hi all

I have always been aware of the personal savings allowance that each of us get (£1000 interest tax free for basic rate tax payer and £500 tax free for higher rate tax payers) but i did not know about the additional £5000 starting savings rate of UP TO an extra £5000 tax free on interest income if one earn's below £17570.

The reason I am asking is that with the recent interest rate rises I am trying to sort out my mum and dads easy access cash accounts and I believe if i split them in a certain way (in favour of my mother who is on the lower income) then they will have to pay no tax (or very little) on the interest they earn.

My issue is this I am finding it a little difficult to interpet how its implimented so i will use my mum as the real life example to see if others agree or disagree with it.

So my mum earns £3500 a year from part time work, £7000 from her state pension, £1000 from dividends. She also gives my father a portion of her personal allowance via something called marriage allowance.

Am I correct in saying if you take my mums total earnings of £3500 + £7000 + £1260 marriage allowance which totals £11750 then she can earn a full £5000 plus £1000 in interest from savings without any further tax to pay on it. Am i also correct that the dividends dont have to be accounted for in this calculation and will not have any tax subjected on it as part of the £2000 dividend allowance we all get.

If on the other hand, for example if my mums earnings were lets say £6500 + £7000 pension and no marriage allowance given to my dad then she would only be able to benfit from £17570 - £6500 - £7000 = £4070 of that £5000 tax free interest allowance. She would however be eligible for that extra £1000 from the personal savings rate regardless..

Sorry if i have complicated things lol and i may have got the figures wrong for her state pension but the principle applies

Thanks Nigel

Now my main hurdle is to explain it to my old man so he understands what I’m doing. :)