Interest and Dividend tax allowance

For 2106/17 how will the £5000 nil rate on interest and the £5000 nil rate on dividends work together?
For example, if person A has £8500 earned income, £6500 interest income and £6000 dividend income. Would they pay zero tax (PA £11000, SPA £1000, Dividend and Interest £5000 each at nil rate). Or pay tax of £1000 as their total taxable income exceeds £17000 and so they lose the £5000 interest tax allowance at zero rate?
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  • In the example, I understand that the dividends after deducting both types of allowance, would be taxed at 7.5%.
    But why is the net savings figure taxed at 0% ? I thought this only applied if the total Income was less than £17,000. In the example it's £21,000
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