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Tax Rates

Tax Rates And Allowances

Income Tax Rates and Taxable bands

UK Excluding Scotland Scotland
Rate 2016-17 2017-18 2018-19
Starting rate for savings: 0% (1) £0-£5,000 £0-£5,000 £0-£5,000
Basic Rate : 20% £0-£32,000 £0-£33,500 £0-£31,500
Higher Rate : 40% £32,000 - £150,000 £33,500 - £150,000 £31,501 - £150,000
Additional Rate : 45% Over £150,001> Over £150,001 Over £150,001

(1) If your non-savings income is above this limit then the 0 per cent starting rate for savings will not apply.

For 2016/17 and 2017/18
There is no tax credit on dividends. The first £5000 of dividends are tax free, if there is basic rate band remaining then the rate of tax is 7.5%, 32.5% for the remaining higher rate band and 38.1% for the additional rate band.

There is also a savings allowance of £1000 for basic rate taxpayers and £500 for higher rate tax payers but not additional rate taxpayers.

Income Tax Allowances

Income Tax Allowances 2016-17 2017-18
Personal Allowance (2) £11,000 £11,500
Income limit for Personal Allowance £100,000 £100,000
Married Couple's Allowance for those born before 6th April 1935 (3) (4) £8,355 £8,355
Income limit for age-related allowances £27,700 £27,700
Minimum amount of Married Couple's Allowance £3,220 £3,220
Maximum Marriage Allowance Transfer (5) £1,100 £1,100

(2) The Personal Allowance reduces by £1 for every £2 of income above £100,000. This reduction applies irrespective of age.

(3) These age related allowances reduce by £1 for every £2 of income above the income limit for age-related allowances. Unless income is in excess of £100,000 the allowance will never be less than the basic Personal Allowance or minimum amount of Married Couple's Allowance.

(4) Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.

(5) One individual must be a basic rate tax payer and the other must have income less than the personal allowance.

Capital Gains Tax Rates And Annual Tax Free Allowances

Capital Gains Annual Exemption 2014-15 2015-16 2016-17
Annual Individuals, personal representatives and trustees for disabled people £11,000 £11,100 £11,100

Rates for Capital Gains Tax

Rates for individuals 10%/18%/20%/28%. Rates for individuals are 10%/18% up to the limit of the remaining basic rate tax band (if any) after deducting taxable income and 20%/28% on gains above that limit. The extra 8% applies on disposals of residential properties.
10 per cent for gains qualifying for Entrepreneurs Relief

Inheritance Tax Thresholds

The Inheritance Tax threshold (or  nil rate band ) is the amount up to which an estate will have no Inheritance Tax to pay.

If the estate - including any assets held in trust and gifts made within seven years of death - is more than the threshold, Inheritance Tax will be due at 40 per cent on the amount over the nil rate band.

This table shows the different thresholds in use for deaths going back to 2000.

In the Budget 2011 it was announced that from April 2012, a reduced rate of IHT of 36% will be introduced where 10% or more of the net estate is left to charity.

From To Threshold/Nil Rate Band
6th April 2009 5th April 2021 £325,000
6th April 2008 5th April 2009 £312,000
6th April 2007 5th April 2008 £300,000
6th April 2006 5th April 2007 £285,000
6th April 2005 5th April 2006 £275,000
6th April 2004 5th April 2005 £263,000
6th April 2003 5th April 2004 £255,000
6th April 2002 5th April 2003 £250,000
6th April 2001 5th April 2002 £242,000

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