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?
  • The starting rate band (and thus the 0% rate for savings income) is available provided the savings income falls within the first £5,000 of taxable income. As the NSI has been reduced to nil (by using the personal allowance) £5,000 of the savings income can be taxed at 0%.

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